SAN FRANCISCO—Essex Property Trust Inc. and BRE Properties Inc. have completed the merger of the two companies, forming a combined company with equity market capitalization of approximately $11.1 billion and a total market capitalization of approximately $16.2 billion. "We are excited to consummate the merger and move forward to combine these two great organizations to form the leading West Coast multifamily REIT," says Michael Schall, president and CEO of Essex.
According to Schall, "The integration effort is proceeding as planned, which we believe will result in a stronger platform for sustainable growth, superior service for our residents, and expanded career opportunities for our employees.”
Constance B. Moore, Chief Executive Officer of BRE, says that “We are pleased that our stockholders have expressed overwhelming support and approval for this merger.” The common stock of the combined company will trade under the symbol ESS on the New York Stock Exchange.
“The combined portfolio of Essex and BRE will provide substantial value for our stockholders through enhanced operations, improvements in the costs of capital and synergistic opportunities,” she continues.
Transaction Details Under the terms of the agreement, each share of BRE common stock has been converted into 0.2971 newly issued shares of Essex common stock plus $7.18 in cash, without interest. The cash consideration was adjusted as a result of the authorization and declaration of a special distribution to the stockholders of BRE of $5.15 per share of BRE common stock. Former Essex stockholders hold approximately 63% of the combined company's common stock, and former BRE stockholders hold approximately 37% of the combined company's common stock.
On March 31, 2014, BRE formed three new joint ventures with two separate third-party institutional joint venture partners and contributed 17 BRE properties with an aggregate estimated value of approximately $888 million to the joint ventures. As a result of the contribution of the properties to the joint ventures and the merger, Essex Portfolio LP and its subsidiaries now hold a 50% interest in each of the joint ventures. Additionally, BRE received proceeds from approximately $475 million in mortgage financings of the properties contributed to the joint ventures. As a result of the closing of these joint ventures, BRE authorized the payment of the special distribution described above. The special distribution will be paid on or about April 9, 2014 to BRE stockholders of record as of the close of business on March 31, 2014.
Irving F. Lyons III, former chairman of the Board of BRE, and Thomas E. Robinson and Thomas P Sullivan, former directors of BRE, have joined Essex's Board of Directors in connection with the merger. George Marcus will serve as chairman of the combined company. Schall, Essex's President and Chief Executive Officer, will serve as President and Chief Executive Officer of the combined company.
Advisors UBS Investment Bank acted as lead financial advisor to Essex. Citigroup acted as financial advisor to Essex. Goodwin Procter LLP acted as legal advisor to Essex. Wells Fargo Securities acted as exclusive financial advisor and Latham & Watkins LLP acted as legal advisor to BRE.
Continue Reading for Free
Register and gain access to:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
