GE Capital has agreed to buy US property holding company Security Capital Group in a US$4bn (£2.74bn) deal.
The deal will give GE a stake in Security Capital European Realty, which owns four European property companies including developers Akeler and Bernheim Comofi, as well as storage company Access Storage Solutions.
In the US, the company will gain ownership positions in Storage USA, retail developer Regency Centres and car park owner and operator InterPark.
Under the terms of the deal, Security Capital’s class B shareholders will receive cash, or a combination of cash and common stock of distribution giant ProLogis Trust, owned by Security Capital.
GE Capital has the option of buying Security Capital and its 29% stake in ProLogis in cash. If the payment is made in cash and ProLogis stock, Security Capital’s class B shareholders would receive US$2.9bn (£1.99bn) in cash from GE Capital and US$1.1bn (£0.754bn) in ProLogis shares held by Security Capital.
GE Capital also will pay a total of about US$50m (£34.29m) to a handful of class A shareholders, whose shares will be valued at 50 times the consideration paid to class B shareholders.
GE Capital will assume US$1.4bn (£0.96bn) in debt and preferred stock of Security Capital, as well as a cash balance of about US$1.4bn (£0.96bn), which includes proceeds from Security Capital’s sales of lodging company Homestead Village and its interest in US Reit CarrAmerica Realty Corp. (CRE).
Merrill Lynch acted as financial advisor to GE Capital while Goldman Sachs acted for Security Capital.
EGi News 17/12/01
