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Bloomberg
Cousins Properties Inc. agreed to buy Parkway Properties Inc. for about $1.95 billion in stock, then spin off the combined company’s Houston office buildings into a separate real estate investment trust.
Parkway shareholders will receive 1.63 shares of Cousins stock for each share they hold, the companies said in a statement.
The deal values Parkway at $17.46 a share, a 13 percent premium. Immediately upon the transaction’s completion, the combined company will initiate a taxable spinoff of the Houston properties through a special dividend to shareholders.
Cousins, the larger of the two REITs, will focus on Class A office towers in urban U.S. Sun Belt markets, while the spinoff will enable stockholders to benefit from an expected recovery in the energy industry. Cousins shareholders will own 52 percent of both the combined REIT and the spinoff and Parkway investors will have 48 percent.
“These creative transactions continue Cousins’ heritage as a proven sharpshooter in the growing Sun Belt markets, deepening our presence in Atlanta, Austin and Charlotte and establishing a strong presence in Phoenix, Orlando and Tampa,†Larry Gellerstedt, president and CEO of Atlanta-based Cousins, said in the statement.
“At the same time, we believe that unlocking the value in our Houston portfolio allows us to capitalize on that market’s eventual resurgence.â€
The deal is expected to close in Q4. Cousins will have 41 properties with 15.8 million square feet of rentable space.