Two REITs Merge in $1.9B Deal
In a major multifamily real estate investment trust merger, Camden Property Trust is acquiring Summit Properties, Charlotte, N.C., for about $1.9 billion, including the assumption of Summit debt.
The deal places a value of $31.37 per Summit share, Camden said, based on the closing price of Camden shares on Oct 1. Summit shareholders may opt to receive either $31.20 in cash or 0.6687 of a Camden share per Summit share, Camden reports.
Richard J. Campo, chairman and CEO, Camden, said, "This strategic merger takes both Camden and Summit to the next level in size and potential. This merger creates the fifth-largest multifamily public company in the U.S. with a $5.7 billion total market capitalization and $2.9 billion equity market cap."
And Steve LeBlanc, CEO, Summit, noted that Summit shareholders "will receive a premium over the current share price as well as a 26% increase in annual dividends for those electing Camden shares in the merger."
Following the merger announcement, Summit shares opened at $30.40 on Oct. 5, after closing at $27.84 on the previous day. Camden shares had declined to $45.29 on Oct. 5, from an Oct. 4 closing of $46.90.
Camden expects that Summit's five core markets - Washington, Southeast Florida, Atlanta, Charlotte and Raleigh, N.C. - will be in the top 26 employment growth markets for the next five years.
Of these, the only market the two REITs share is Charlotte, according to Keith Oden, president and COO, Camden, who sees the acquisition as "the perfect geographic and product alignment."
The REIT said that the aggregate amount of cash issued in the merger to Summit stockholders will be about $434.4 million.
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