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

• 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

Comments

[User 43034176]

Long $PLD and small add today on the -4.8% pullback

[Grazi57]

Looks like a small buy opportunity...

[Joe X]

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]

Classic sign of stock overvaluation. Hope that's not true.

[Chervon Public Relations]

Oh, God. Did Steve Ballmer become CEO of Prologis now?

[spend my cash]

long for PLD nearly 20 years. Obviously a great run, a stock deal, hmmmm

[quehombre]

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

[User 40187946]

@quehombre I disagree, hombre.

[quehombre]

Are my figures wrong ???

[wildpitcher]

Show your work, please

Dave

[kovnat]

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?

DGI Dan

[wildpitcher]

@kovnat ,

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

Dave

[Einherjar]

They will sell $3.6B non core properties

[JDB_invest]

Hamid is not changing anything..... they will sell all non-core assets