Prologis wins Duke Realty bid as deal is boosted to US$26b

PROLOGIS Inc boosted its offer for US warehouse landlord Duke Realty Corp to an all-stock offer of about US$26 billion including debt, securing a deal after months of negotiations.

Prologis plans to hold about 94 per cent of Duke Realty’s assets and exit one market, the companies said in a statement. Both firms’ board of directors have approved the transaction.

Prologis, which owns industrial warehouses across the US and other countries, went public with a US$24 billion acquisition offer in early May, after months of private pushback from Duke. That initial bid was rejected by Duke, which called the offer “insufficient”. Duke shares climbed as high as 7.5 per cent in pre-market trading in New York on Monday (Jun 13). Prologis stock was down as much as 4.1 per cent. 

“We have admired the disciplined repositioning strategy the Duke Realty team has completed over the last decade,” Prologis chief executive officer Hamid Moghadam said in the statement. “They have built an exceptional portfolio in the US, located in geographies we believe will outperform in the future.”

Prologis will gain properties in areas including southern California, New Jersey, south Florida and Dallas. The deal will also give the company 11 million square feet of real estate that’s being currently developed. 

Duke investors will receive 0.475 Prologis shares for each Duke share they own. The companies expect to close the deal in the fourth quarter, said the statement. 

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“We have always respected Prologis, and after a deliberate and comprehensive evaluation of the transaction and the improved offer, we are excited to bring together our two complementary businesses,” Duke CEO Jim Connor said. BLOOMBERG