Sam Zell’s Equity Office Properties Trust is to buy fellow real estate investment trust Cornerstone properties for $2.8bn in cash and stock.
EOP is already the US’s largest publicly traded office company and this deal sees the company increase the space it owns by 24%. Once the takeover is complete, Equity Office will own and operate 380 buildings comprising of 8.87m m2.
Equity Office will pay $1.1bn in cash and issue 63.6m shares. Cornerstone shareholders will receive either $18 a share or 0.7009 of an Equity Office common share or a combination of both.
The deal values Cornerstone at $4.6bn which includes transaction costs and the assumption of $1.8bn debt. The deal is expected to close in the third quarter.
Sam Zell, chairman of the board of Equity Office, said: “This merger captures for shareholders of both entities the true benefits of consolidation in our industry.”
Timothy Callahan, president and chief executive of the company, said Cornerstone’s portfolio complemented Equity Office’s geographic locations. More than 1.2m m2 of the Cornerstone’s offices are located in Equity Office’s top eight core markets.
