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WP Carey plans to buy Corporate Property Associates in US$6b deal
[BENGALURU] WP Carey Inc said on Monday it plans to buy commercial property owner Corporate Property Associates 17 – Global Inc in a US$6 billion deal that could make it the No 2 US net lease real estate investment trust by market value.
The combined company's portfolio, spanning North America and Europe, will include both office properties and industrial facilities and boast clients such as The New York Times, Marriott International and German home improvement store chain Hellweg.
CPA 17 stockholders will receive 0.160 shares of WP Carey for each share held, equivalent to US$10.72 per share based on the company's Friday closing price.
The combined company will have a proforma enterprise value of US$17.3 billion and a market capitalization of US$11 billion, WP Carey said, behind Realty Income Corp - the largest US net lease REIT with US$15 billion market value.
Net lease REITS collect a portion or all of the taxes and maintenance costs that are normally paid by the property owner, allowing them to maintain low cost structures.
Office properties will form the biggest chunk of their portfolio at 26 per cent, WP Carey said. Industrial facilities will account for 24 per cent of the combined company, while warehouses and retail properties making up 19 per cent each.
According to the terms of the offer, CPA 17 may evaluate alternative proposals and enter into negotiations with third parties for a period of 30 days, the companies said.
CPA 17 had full or partial ownership interests in 411 properties totaling about 44.4 million square feet as of Dec 31. WP Carey has a portfolio of 886 commercial real estate properties covering about 85 million square feet.