A real estate investment fund managed by Brookfield Asset Management is acquiring Forest City Realty Trust for $11.4bn (€9.73bn).
Brookfield and Forest City said they have entered into an agreement under which a Brookfield real estate investment fund will buy each Forest City’s shares for $25.35 each.
The amount being paid is a 26.6% premium to Forest City’s closing share price prior to market speculation on June 15 that companies were in talks. The total amount includes unconsolidated debt.
Forest City’s $8.0bn worth of US assets includes 6.3m square feet of office space, 2.3m square feet of premier life science assets, 2.2m square feet of retail space and 18,500 multifamily units, as well as five large-scale development projects in the New York Metro area, San Francisco and Washington, DC.
Brian Kingston, the chief executive officer of Brookfield Property Group, said: “Forest City has created a high-quality portfolio of operating and development assets over its 100-year history. We look forward to creating further value in these great assets on behalf of our limited partners.”
David LaRue, the president and chief executive officer of Forest City, said: “We are pleased that Brookfield recognizes the success of our ongoing efforts to strengthen the business, the attractiveness of our office, apartment and mixed-use portfolio, the skill and dedication of our associates, and the significant opportunities to drive future growth embedded in our more than 18 million square feet of entitlements.
“We believe that this transaction will deliver an immediate cash premium to stockholders for their investment and represents the best path forward for our company and our stockholders.”
The proposed transaction, which is subject to other conditions, has been recommended by Forest City’s board and is expected to close in the fourth quarter of 2018.