Blackstone to Buy CarrAmerica
In Deal Valued at $5.6 Billion
In the latest in a string of private-equity firm acquisitions, Blackstone Group has agreed to buy real estate investment trust CarrAmerica Realty Corp. for about $5.6 billion.
The deal values CarrAmerica shares at $44.75 each in cash, an 18.4% premium on the stock's close on Feb. 16, just prior to published reports about a potential acquisition, CarrAmerica said.
The deal is expected to close in the second quarter.
The acquisition "will provide us with a valuable platform for future investments in the office sector," said Jonathan Gray, senior managing director of Blackstone Group, in a statement.
CarrAmerica owns, develops and operates office properties in 12 U.S. markets. The REIT and its affiliates own, directly or through joint ventures, interests in 285 operating office properties, totaling about 26.3 million square feet.
It has been the focus of much takeover talk since June 2005. Recently, rival Mack-Cali Realty Corp. has been snapping up shares of CarrAmerica.
Shares of CarrAmerica, based in Washington, D.C., were up $3.52 or 8.6%, to $44.60 in morning composite trading on the New York Stock Exchange. "Over the past few years, CarrAmerica has emerged as a leader in its markets with growing occupancy, a markedly upgraded portfolio of office properties and a very dedicated and talented organization," said Chief Executive Thomas Carr in a statement. "And yet, with our most aggressive performance assumptions, we don't believe we could match the value being offered to our shareholders today by this offer," he noted.
Blackstone has been bullish on the lodging industry. In the past two years, it has paid a total of $8 billion for six publicly traded hotel companies. When debt is included, the number is more than $13 billion. Last month, Blackstone agreed to acquire MeriStar Hospitality Corp. for $2.6 billion, including debt.
Goldman Sachs advised CarrAmerica on the deal, while Bank of America and Deutsche Bank acted as financial advisers to Blackstone.
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