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Logistics, logistics, logistics - Prologis in deal for Liberty Property

Oct. 27, 2019 6:28 PM ETPrologis, Inc. (PLD), LPTLPT, PLDBy: Stephen Alpher, SA News Editor14 Comments
  • There's consolidation in the red-hot industrial REIT sector, with Prologis (NYSE:PLD) agreeing to acquire Liberty Property Trust (NYSE:LPT) in an all-stock deal valued at about $12.6B.
  • Prologis plans on selling about $3.6B in assets - roughly $2.8B worth of non-strategic logistics assets, and $700M of office properties.
  • Immediate synergies are seen at $120M, and PLD expects a quick boost to core FFO per share of $0.10-$0.12. After stabilization, sales, and redeployment of capital, another $0.04 of core FFO accretion is anticipated.
  • Terms: LPT owners will receive 0.675 shares of PLD for each share of LPT they hold. That's a current value of $61.33 vs. LPT's close on Friday of $50.57, or about a 20% premium.
  • A conference call is set for Monday morning at 10 ET.
  • Source: Press Release

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Comments (14)

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Long $PLD and small add today on the -4.8% pullback
Grazi57 profile picture
Looks like a small buy opportunity...
Joe X profile picture
Looking forward to the PLD/LPT merger call today, and in particular will want to hear why they structured this as an all-stock deal, particularly given the plan to sell a large part of the portfolio immediately after closing. PLD is already under-levered, and could pretty easily have paid cash and just obtained a bridge loan to cover the asset sales. Initial accretion of $0.10 - $0.12 is modest relative to the dollars involved.
glssmrbl profile picture
Classic sign of stock overvaluation. Hope that's not true.
Oh, God. Did Steve Ballmer become CEO of Prologis now?
spend my cash profile picture
long for PLD nearly 20 years. Obviously a great run, a stock deal, hmmmm
Prologis's weighted average cost of capital is 6.81%. ROIC % is 2.62%. Returns do not match cost of capital.
A losing proposition. The gospel according to Hombre
@quehombre I disagree, hombre.
Are my figures wrong ???
wildpitcher profile picture
Show your work, please

kovnat profile picture
Is this a harbinger of a major shift away from PLD's focus on logistics properties. Liberty Property Trust, in addition to their creating distribution hubs, they have a portfolio of light manufacturing real estate, R&D facilities, and office properties. Will this dilute their focus and distract management from an area in which they seem to excel?

wildpitcher profile picture
@kovnat ,

Looks like (from the news report here) that they plan to sell many of the non-strategic things.

Einherjar profile picture
They will sell $3.6B non core properties
JDB_invest profile picture
Hamid is not changing anything..... they will sell all non-core assets
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