HAMILTON, BERMUDA-Brookfield Property Partners LP said Monday it plans to acquire New York City-based Brookfield Office Properties in a transaction valued at $5 billion. If the deal goes through, the result will be one of the world’s largest CRE companies, with $45 billion of assets and ownership of more than 330 million square feet of office, industrial, multifamily and retail across four continents.
BPY CEO Ric Clark says the offer represents “an attractive opportunity for BPO shareholders to exchange their common shares for an interest in our flagship global property company and cash.” Further, he says, “We believe this transaction will consolidate our global office properties under one platform and substantially increase Brookfield Property Partners’ public float, which should help accelerate our growth strategy.” BPY estimates the float would become $4 billion after the deal goes through.
The offer to buy the 49% of BPO common stock that BPY doesn’t already own would give BPO shareholders the option of receiving either 1.0 limited partnership unit in BPY or $19.34 in cash per share in BPO. It values BPO common shares at a premium of 17% to the 30-day volume weighted average price of BPO common shares on the New York Stock Exchange and 16% to the 30-day volume weighted average price of its shares on the Toronto Stock Exchange.
The acquisition process, which begins today with a BPY presentation to BO’s board, is expected to take several months to complete. BPY was spun off from Toronto-based Brookfield Asset Management, its external manager, this past April.