BRE Properties Inc.
) finally confirmed that it has received a non-binding offer from
Essex Property Trust, Inc.
) to purchase BRE Properties in a cash-and-stock deal valued at
$4.48 billion. Discussions are underway and both companies have
agreed to an exclusivity period.
BRE PROPERTIES (BRE): Free Stock Analysis
ESSEX PPTY TR (ESS): Free Stock Analysis
INDEP REALTY TR (IRT): Free Stock Analysis
SPIRIT REALTY (SRC): Free Stock Analysis
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As per the offer, shareholders of BRE Properties would receive
0.2971 shares of Essex common stock and $12.33 in cash for each
BRE share they hold. If the deal materializes, it will
essentially lead to the creation of a large West Coast apartment
real estate investment trust (REITs) that can enjoy a solid
property base and effectively leverage on this attractive market
and reward shareholders accordingly.
As a matter of fact, San Francisco-based BRE Properties is
involved in developing, acquiring and managing communities
predominantly in the chief metropolitan markets of Southern and
Northern California and Seattle. On the other hand, Essex
Property is engaged in multifamily residential properties in
select West Coast markets.
The acquisition of BRE Properties would essentially enhance
Essex's portfolio. On the other hand, a comparatively weak
performance by BRE Properties in recent years, even with a solid
property base in the attractive growth markets, sets the ground
for its sale. We believe any move that maximizes shareholder
value is welcome and look forward to the market to see what the
Notably, with this news doing the rounds in the market last week
following a Bloomberg report, the investment firm Land &
Buildings Investment Management LLC insisted BRE Properties to
consider this sale proposal.
Both BRE Properties and Essex Property currently hold a Zacks
Rank #3 (Hold). Moreover, investors interested in the apartment
REIT industry may consider stocks like
Independence Realty Trust, Inc.
Spirit Realty Capital, Inc.
). Both these stocks carry a Zacks Rank #2 (Buy).