Cousins Properties, Parkway Properties Announce Stock-For-Stock Merger
Cousins Properties Inc (NYSE: CUZ), a self-administered and self-managed real estate investment trust announced on Friday it has entered into a definitive agreement to merge with Parkway Properties Inc (NYSE: PKY), an integrated real estate investment trust.
The merger will consist of a stock-for-stock transaction in which Parkway shareholders will receive 1.63 share of Cousins stock for each share of Parkway stock they own. The merger agreement also calls for a simultaneous spin-off of the Houston-based assets of both companies into a new publicly-traded REIT ("HoustonCo).
The rationale of the merger is to create two independent and internally-managed office REITs, the first being a larger and more diverse Cousins and a well-capitalized HoustonCo.
Cousins shareholders will own approximately 52 percent of the combined entity while Parkway shareholders will control the remaining 48 percent.
The deal has been approved by the Boards of Directors of both companies.
"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. We firmly believe our shareholders will benefit by having an expanded portfolio of office towers in key urban submarkets, greater tenant and geographic diversity and enhanced access to the capital markets," said Larry Gellerstedt, President and Chief Executive Officer of Cousins. "At the same time, we believe that unlocking the value in our Houston portfolio allows us to capitalize on that market's eventual resurgence through the creation of HoustonCo."
Jim Heistand, Chief Executive Officer of Parkway, stated, "We believe these compelling strategic transactions demonstrate our continued commitment to enhancing shareholder value by creating two separate and highly-focused REITs with strong balance sheets and clear investment strategies. I could not be more excited to join my colleagues to launch this new company poised for success. Our properties are located in what we view as the strongest Houston submarkets, with a diversified roster of quality tenants and limited near-term lease expirations. We believe HoustonCo will thrive due to its strong, flexible balance sheet and a seasoned management team that has a history of delivering excellent results for its shareholders."
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