REIT WP Carey to buy Corporate Property Associates 18 in $2.7 bln deal (updated)

Plexus

28/02/2022 16:23

(Adds details, deal advisers)
    Feb 28 (Reuters) - Real estate investment trust WP Carey Inc
 WPC.N  will buy Corporate Property Associates 18 Global Inc in
a $2.7 billion cash-and-stock deal, the companies said on
Monday.
    WP Carey, which manages a portfolio of more than 1,000
properties in commercial real estate, said the deal would add
Corporate Property Associates' self-storage assets, and also
mark its exit from investment management. 
    Mergers and acquisition activity in the REIT sector reached
a record high in 2021 as cheap capital from low interest rates,
a robust U.S. housing market, and economic recovery from the
pandemic buoyed the share performance of the trusts. 
    REIT M&A transaction volumes rose to $140 billion in 2021,
up from $17 billion in the previous year, according to real
estate services provider JLL.
    WP Carey has offered Corporate Property Associates
shareholders 0.0978 of its stock plus $3.00 of cash for each
share held, or $10.59 per share based on WP Carey's Friday
close.
    The target can still negotiate alternative proposals during
the "go shop" period that is through March 30. 
    WP Carey expects to fund the deal, expected to close during
the third quarter, with net proceeds from sale of certain
Corporate Property Associates assets planned before the deal
closing and existing liquidity.
    WP Carey shareholders will own about 93% of the combined
company.  urn:newsml:reuters.com:*:nPn7QFRYja
    BofA Securities was the lead financial adviser to WP Carey,
while Morgan Stanley was the financial adviser to Corporate
Property Associates' Special Committee.
    Shares of WP Carey were marginally higher in morning trade
in a weak broader market.

 (Reporting by Aishwarya Nair in Bengaluru and Chibuike Oguh in
New York; Editing by Sriraj Kalluvila)
 ((Aishwarya.Nair@thomsonreuters.com; +91-8067494421;))