SAN FRANCISCO AND PALO ALTO, CALIF. — Essex Property Trust Inc. (NYSE: ESS) and BRE Properties Inc. (NYSE: BRE) have completed the merger of the two multifamily REITs, forming a new entity with a total market capitalization of approximately $16.2 billion.
Going forward, the combined company will trade under the ticker symbol ESS on the New York Stock Exchange. The REIT’s equity market capitalization totals approximately $11.1 billion.
“We are excited to consummate the merger and move forward to combine these two great organizations to form the leading West Coast multifamily REIT,” says Michael Schall, president and CEO of Essex. “The integration effort is proceeding as planned, which we believe will result in a stronger platform for sustainable growth, superior service for our residents and expanded career opportunities for our employees.”
With the merger complete, former Essex stockholders hold approximately 63 percent of the combined company’s stock, while former BRE stockholders hold approximately 37 percent. Each share of BRE common stock was converted into 0.2971 shares of the new common stock, plus $7.18 in cash per share.
“We are pleased that our stockholders have expressed overwhelming support and approval for this merger,” says Constance Moore, CEO of BRE. “The combined portfolio of Essex and BRE will provide substantial value for our stockholders through enhanced operations, improvements in the costs of capital and synergistic opportunities.”
Irving Lyons III, former BRE chairman of the board, as well as Thomas Robinson and Thomas Sullivan, former directors of BRE, have joined Essex’s board of directors. George Marcus, founder of both Essex and Marcus & Millichap, will serve as chairman of the board for the combined company. Schall will serve as president and CEO of the combined company.
UBS Investment Bank served as lead financial advisor to Essex, while Citigroup provided additional financial advising and Goodwin Procter LLP provided legal advising. Wells Fargo Securities acted as exclusive financial advisor for BRE, while Latham & Watkins LLP worked as legal advisor.
Essex, based in Palo Alto, Calif., has ownership interests in 233 multifamily properties following the merger. The company’s stock price closed at $172.30 per share yesterday, up from $152.38 per share a year ago.
— John McCurdy