Essex Property buying BRE in $4.34B deal

Essex Property Trust buying BRE Properties in deal valued at approximately $4.34 billion

Associated Press

PALO ALTO, Calif. (AP) -- Essex Property Trust is buying BRE Properties in a deal valued at approximately $4.34 billion, creating the biggest publicly traded West Coast apartment building owner.

Each BRE share will be converted into 0.2971 newly issued shares of Essex Property common stock plus $12.33 in cash. The deal is valued at $56.21 per BRE share based on Essex Property's Wednesday closing price of $147.70.

San Francisco's BRE Properties Inc. currently has about 77.2 million outstanding shares, according to FactSet.

Essex currently has ownership interests in 163 multifamily properties with an additional 11 properties in various stages of development. BRE directly owned 75 multifamily communities and had a joint venture interest in an additional apartment community as of Sept. 30. The company's apartment complexes are mostly in major metropolitan markets in Southern and Northern California and Seattle.

Essex said Thursday that it received $1 billion in committed financing that's available if need to fund the cash part of the transaction. The Palo Alto, Calif. company said it is looking at several options to fund the cash component of the deal, including asset sales, joint ventures or new financing.

Essex President and CEO Michael Schall will serve in those same roles for the combined company. Three BRE directors will join Essex Property's board, expanding it to 13 members.

Both companies' boards unanimously approved the deal. It still needs approval from their shareholders.

The company will keep the Essex Property name and continue to trade under the "ESS" ticker symbol.

The transaction is expected to close in 2014's first quarter.

Shares of Essex Property Trust Inc. fell $2.50 to $145.20 in morning trading. BRE's stock declined 93 cents to $54.98.

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