On Wednesday, Chambers Street Properties and Gramercy Property Trust Inc., announced that they have entered into an agreement to merge, creating the largest U.S. industrial and office net lease real estate investment trust (REIT).
Under the agreement, Gramercy shareholders will get 3.1898 shares of Chambers Street for each Gramercy share held. Shareholders of Chambers Street will own 56 percent of the combined company, with Gramercy investors owning the rest. The offer of $25.36 per share represents a premium of 8.5 percent to Gramercy's Tuesday close. The deal is worth $1.45 billion, according to Reuters calculations, based on 57.3 million Gramercy shares outstanding as on May 5.
The combined firm brings together two complementary portfolios focused on industrial and office real estate, and will have an enterprise value of about $5.7 billion, reports Business Wire. The combined company will retain the Gramercy name and will trade on the New York Stock Exchange with Gramercy's current ticker symbol of "GPT." The deal is expected to close in the fourth quarter of this year.
Charles Black, currently chairman of the Chambers Street Board, will be the non-executive board chairman, while Gramercy CEO, Gordon DuGan, will serve as the director and CEO of the merged company. The Gramercy management team will lead the combined company with Benjamin Harris as President and Jon Clark as Chief Financial Officer. Martin Reid, Chambers Street's Interim President and Interim Chief Executive Officer, and Chief Financial Officer, will be Head of Transition of the combined company.
Chambers Street's Charles Black said that they are "thrilled to combine with Gramercy" to create an industry leader positioned for long term growth. Black further mentioned being confident that the merger will continue to drive "market-leading returns for shareholders." Meanwhile, DuGan stated that the combined company will create a market leader with "greater scale, broader tenant and geographic diversification" across the United States and Europe.
