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WASHINGTON, DC-Republic Property Trust has scheduled a special meeting of its shareholders to approve its acquisition by Malvern, PA-based Liberty Property Trust. The $850-million all-cash transaction was first announced July 24 and reported on GlobeSt.com.
Scheduled for Thursday, Sept. 27, shareholders will vote whether to approve the merger. The purchase price per share--$14.70 in cash, without interest, for each common share issued--represents a 28% premium over Republic's closing share price on July 23, the day before the deal was announced.
Some analysts viewed the transaction as a major win for Republic Property Trust when it was first announced. Friedman, Billings, Ramsey & Co. analyst Wilkes Graham issued a research note at the time explaining why he thought the price Liberty paid for the REIT was too high. "We estimate a 5.8% cap rate on the transaction and believe the price paid is well above the market's expectations," he wrote. A more appropriate price point, he suggested, would have been $11 per share. Several REITs with whom he spoke had given him that figure as the top line price for Republic Property Trust, citing the company's high exposure to the Dulles Corridor as one reason. According to Liberty Property Trust, though, the deal is a fast track for it into the DC market.
Once the transaction closes, Liberty will own 2.6 million sf of office properties in the Greater Washington, DC area, including 13 operating properties consisting of 24 office buildings that are part of Republic's portfolio. Also, the company is redeveloping a property in Downtown DC, which when finished will deliver some 176,000 sf of prime office space.
"We have been strategically focused on entering this market for some time and are pleased to be able create such a critical mass of office assets in the DC market through a single transaction," CEO and chairman William P. Hankowsky said in a statement at the time.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
