LPT Liberty Property Trust

By Micah Maidenberg

Shares of Liberty Property Trust (LPT) jumped in Monday morning trading, after its larger rival Prologis Inc. (PLD) said it would acquire the warehouse-focused company.

Under terms of a deal agreed to by both companies, Liberty stockholders will receive 0.675 shares of Prologis for each share of Liberty they own. Including the assumption of debt, the deal value totals around $12.6 billion, according to a statement Prologis issued Sunday.

Shares of Liberty were up 17% to $59.01. Shares of Prologis slipped about 3% to $87.74.

Both Prologis and Liberty are focused on developing, acquiring and leasing out warehouses for ecommerce distribution centers, industrial operations and other logistics uses.

San Francisco-based Prologis expects immediate cost savings tied to the acquisition of $120 million, which it said would increase annual core funds from operations by 10 to 12 cents a share. FFO is a profit metric used by real estate companies that excludes certain gains and costs, like depreciation.

The company also forecasts another $60 million in annual savings, mostly from what it called "incremental development value creation."

The deal must be approved by Liberty shareholders. Prologis expects it to close in the first quarter next year.

Prologis also expects to sell about $3.5 billion worth of assets tied to the merger, including $2.8 billion non-strategic logistics properties and $700 million in office real estate.

Write to Micah Maidenberg at micah.maidenberg@wsj.com

(END) Dow Jones Newswires

October 28, 2019 10:10 ET (14:10 GMT)

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