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REITs unveil link-up
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March 1, 1999: 10:03 a.m. ET
Duke Realty's $1.7B tie-up with Weeks will spawn regional giant
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LONDON (CNNfn) - Real estate investment trusts Duke Realty Investments and Weeks Corp. agreed to merge Monday in a $1.7 billion deal that will spawn a super-regional REIT with more than 90 million square feet of industrial space stretching from the U.S. Midwest to the Sunbelt.
The value of the tie-up, to be accounted for as a tax-free pooling of interests, includes the assumption of $654 million in debt.
The combined company, to be called Duke-Weeks Realty, will command strategic positions in 13 regional markets including Atlanta, Indianapolis, Chicago and St. Louis. It will be based in Indianapolis, Indiana, Duke's current headquarters.
The new name will take effect following ratification by the companies' shareholders in June.
A Duke spokesperson told CNN the deal will not result in the elimination of any jobs.
Duke (DRE) owns interests in a wide-ranging portfolio of industrial and office properties in eight mid-western American states. The portfolio includes 493 properties totaling about 60 million square feet. The company also owns or controls more than 2,700 acres of land able to support millions of square feet in additional development.
Atlanta-based Weeks (WKS) is active in the Southeast, operating through a diverse swathe of industrial and suburban office properties in 10 Sunbelt cities.
Under the merger terms, each share of Weeks' common stock will be exchanged for 1.38 shares of Duke common stock. After completion of the deal, Weeks' shareholders will own about 28 percent of the combined company on a diluted basis.
Thomas Hefner, Duke's current chairman, president and chief executive officer will be chairman and chief executive of the new company. A majority of the new company's directors will come from Duke's board.
Duke-Weeks will retain Atlanta as a primary hub for the Sunbelt.
Merrill Lynch is acting as financial adviser for Duke, while Goldman Sachs is advising Weeks.
Shares of Duke were down 5/16 at 21-1/2 Monday on the New York Stock Exchange; Weeks stock was unchanged at 27.
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Duke Realty
Weeks Corp.
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