Chambers Street Properties agreed to buy Gramercy Property Trust Inc. in an all-stock deal that will create a real estate investment trust with an expected enterprise value of about $5.7 billion.
Gramercy holders will receive 3.19 shares of Chambers Street for each share they own, the companies said in a statement Wednesday. The transaction values New York-based Gramercy at $25.36 a share, 8.5 percent more than Tuesday’s closing price. Shareholders of Princeton, New Jersey-based Chambers Street will own 56 percent of the combined company, with Gramercy investors owning the rest, according to the statement.
The combined company will have 288 properties, mostly net-lease office and industrial buildings, in the U.S. and Europe. The deal will give the REIT larger size and scale, broader tenant diversification, increased financial flexibility and a more efficient operating platform to drive growth, according to the statement.
Gordon DuGan, chief executive officer of Gramercy, will be CEO of the combined company, which will retain the Gramercy name. Charles Black, non-executive chairman of Chambers Street, will keep his title at the new company. The deal is expected to be completed in the fourth quarter.
Chambers Street fell 7.4 percent to $7.36 at 9:33 a.m. in New York. Gramercy slipped 0.9 percent to $23.25.