(To read more on the multifamily market, click here.)
CHICAGO-Shareholders representing about 75% of AMLI Residential Properties Trust's common stock have approved a sale to Morgan Stanley Real Estate's Prime Property Fund. The $2.1-billion deal, which values the REIT's multifamily rental portfolio at a capitalization rate between 5% and 6%, is expected to close Tuesday.
The actual vote was 99% in favor of the deal. However, votes were cast on behalf of 75% of the outstanding shares at a special meeting.
A letter of interest from Morgan Stanley prompted AMLI Residential officials to hire financial advisers from J.P. Morgan, who solicited 10 prospective buyers for the company. Morgan Stanley will pay $37.95 per share, a 21% premium above AMLI share prices when the deal was struck in October.
Morgan Stanley's offer also was twice the company's market capitalization, confirming AMLI Residential management's view their shares were undervalued. In addition, company officials say their co-investment strategy, which involves using joint venture partners on development projects, was too confusing for Wall Street but attractive to Morgan Stanley.
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