MAA to Buy Post Properties
August 15 2016 - 11:00AM
Dow Jones News
Real-estate investment trust MAA on Monday said it agreed to buy
Post Properties Inc. for about $3.88 billion in an all-stock deal
combining a pair of Sunbelt apartment owners who have benefited
from a boom in rental demand.
Post shares will be converted into 0.71 shares of newly issued
MAA stock. The deal values Post shares at about $72.53, a 64%
premium according to Friday's closing prices. MAA stockholders will
own about 67.7% and former Post shareholders will own about 32.3%
of the combined company with a market capitalization of roughly $12
billion.
The tie-up was first reported Sunday by The Wall Street
Journal.
The merger would create the largest multifamily REIT by number
of units, with about 105,000 across 317 properties. The new group
would have deep exposure to the fast-growing Sunbelt region, in
markets including Atlanta, Dallas, Houston and Washington, DC. The
companies estimate cost savings of about $20 million.
Shares of both companies have soared in recent years as
investors have been drawn to their relatively rich payouts with
interest rates at historic lows.
Apartment managers have also benefited from the housing recovery
as rising home prices have turned many would-be buyers into
renters. Nevertheless, rent growth has begun to slow, creating an
incentive for mergers that bring expense reductions.
Year to date, real estate is the second-busiest sector for
mergers and acquisitions globally with more than $215 billion of
transactions announced, according to Dealogic.
Meanwhile, there have been more than $52 billion in deals among
REITs, which can include apartment complexes, hotels and other
types of businesses. REITs typically manage properties, collect
rent and pass profits onto shareholders.
If the deal is abandoned, Post could be required to pay to MAA a
termination fee of $117 million, and MAA could be required to pay
to Post a termination fee of $245 million and reimburse MAA's
transaction expenses up to $10 million, according to a securities
filing.
Write to Dana Mattioli at dana.mattioli@wsj.com, Dana Cimilluca
at dana.cimilluca@wsj.com and Anne Steele at
Anne.Steele@wsj.com
(END) Dow Jones Newswires
August 15, 2016 10:45 ET (14:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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