Duke Realty Rejects $24 Billion Offer
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Indianapolis-based Duke Realty Corp. (NYSE: DRE) says the $24 billion offer from logistics real estate firm Prologis Inc. (NYSE: PLD) to acquire the business is “insufficient.” On Tuesday, Prologis approached Duke with the offer in an all-stock transaction.
Duke shareholders would receive 0.466 shares of Prologis common stock for each share of Duke Realty common stock.
“As we have repeatedly made clear to Prologis during our discussions over the past several months, consistent with its fiduciary duties, our Board of Directors has carefully evaluated proposals from Prologis and we remain open to exploring all paths to maximize shareholder value, and we believe the latest offer, virtually unchanged from its prior proposals, is insufficient in that regard,” Duke said in a statement.
The proposal values Duke Realty stock at $61.68 per share based on Prologis’ closing price on May 9, which represents a premium of 29% to Duke’s closing price on the same date, according to our partners at the Indianapolis Business Journal.
Prologis says Duke Realty shareholders would own 19% of the combined company. Prologis operates five logistics facilities in central Indiana, including two in Indianapolis, two in Plainfield and one in Greenwood.
“We have delivered superior returns for our shareholders based on our best-in-class industrial warehouse portfolio, world-class organization and the execution of our growth-oriented strategic plan. Our business is robust, and we have significant momentum, as evidenced by the record levels of in-service and stabilized occupancy and considerable leasing success of our development pipeline. We will continue to drive sustainable value creation and are confident in our ability to generate consistent double-digit growth in FFO, AFFO and dividends for our shareholders for years to come,” said Duke.
Prologis Chief Executive Officer and co-founder Hamid Moghadam says his company has unsuccessfully tried to privately make a deal since November.
“We are confident that the proposed combination will be a win-win for our respective shareholders,” said Moghadam. “We have no doubt that Duke Realty’s shareholders would similarly benefit from long-term value created by the combination of our companies.”
Duke Realty owns and operates about 165 million rentable square feet of industrial assets in 19 major logistics markets.
In its statement, Duke says it will have no further comment on the proposal at this time.