Peakstone Realty Trust is going private.
New York-based Brookfield Asset Management is set to purchase the El Segundo-based industrial real estate investment trust in a roughly $1.2 billion all-cash deal, the Los Angeles Business Journal reported.
The companies announced the deal on Feb. 2. Brookfield will purchase all of Peakstone’s outstanding shares at $21 each, a 34 percent increase from the final closing price on Jan. 30 of $15.62. After the deal was announced, share prices jumped to roughly $20.79 and have remained just shy of $21 each since.
Peakstone opted to sell to Brookfield after finding the asset management giant’s offer delivered “significant value” to its shareholders, Peakstone CEO Michael Escalante said. In making the acquisition, Brookfield will grow its industrial real estate platform by taking over a REIT that manages and operates traditional industrial properties as well as industrial outdoor storage, or IOS.
The sale, Escalante said, speaks to “the value of [Peakstone’s] industrial portfolio and the progress [the firm has] made expanding [its] IOS platform,” Escalante said. Brookfield, for its part, hopes to “benefit from strong long-term fundamentals for the warehouse and IOS sectors,” Lowell Baron, CEO of Brookfield’s Real Estate Group, said of the transaction.
With the acquisition of Peakstone, Brookfield’s portfolio now includes 76 industrial properties. Of those, 60 are IOS sites and 16 are traditional industrial properties.
As part of the agreement, Peakstone will “suspend payment of its regular quarterly dividend, effective immediately, until the earlier of the closing or the termination of the definitive agreement,” according to a news release cited by the Business Journal.
Peakstone will also be granted a 30-day go-shop period, which allows the firm the opportunity to solicit other bids and consider alternative offers before committing to Brookfield. The deal, subject to shareholder approval, is expected to close by the end of the second quarter. — Chris Malone Méndez
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