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Associated Estates to sell itself as investor piles pressure

People walk to Brookfield Place off Bay Street on the day of the annual general meeting for Brookfield Asset Management shareholders in Toronto, May 7, 2014. REUTERS/Mark Blinch

(Reuters) - Associated Estates Realty Corp (AEC.N) agreed to be bought by Canada's Brookfield Asset Management Inc (BAMa.TO) for about $1.66 billion, months after activist investor Jonathan Litt asked for a sale of the U.S. real estate investment trust.

Litt said on Wednesday this deal was an "outstanding outcome for all shareholders."

Litt's Land & Buildings Investment Management LLC said in June the trust's apartment portfolio was not best-suited for public markets and the company should sell itself to Litt's firm or another buyer.

Land & Buildings owns a 2.23 percent stake in the trust, according to Thomson Reuters data.

The offer of $28.75 per share is at a premium of 17.4 percent to Associated Estates' Tuesday closing price.

The deal is valued at $2.5 billion, including debt, the company said.

Associated Estates' portfolio includes 49 apartment communities containing 12,734 units across eight states in the U.S. Midwest. The units are owned either directly or through subsidiaries.

Toronto-based Brookfield Asset Management, which owns a vast portfolio of real estate, energy and infrastructure assets, said on Monday it was raising $1.1 billion by issuing shares to help fund some deals.

The deal for Associated Estates is expected to close in the second half of the year, Brookfield Asset Management said.

Citigroup is the financial adviser to Associated Estates and Jones Day its legal adviser.

Associated Estates' shares were slightly below the offer price at $28.51 in morning trading on the New York Stock Exchange.

(Reporting by Sneha Banerjee in Bengaluru; Editing by Simon Jennings and Don Sebastian)