Duke Realty stock jumps after Prologis buyout bid implies 12% premium and market cap of $21.4 billion

Shares of Duke Realty Corp. jumped 4.5% in premarket trading Monday, after the owner of rentable industrial assets in logistics markets agreed to be acquired by fellow real estate investment trust (REIT) Prologis Inc. in an all-stock deal valued at about $26 billion, including debt. Prologis shares shed 4.1% ahead of the open. Under terms of the deal, Duke Realty shareholders will receive 0.475 Prologis shares for each Duke Realty share they own. Based on Friday’s closing prices, that values Duke Realty shares at $55.69 each, which represents an 11.9% premium and implies a market capitalization for Duke Realty of $21.41 billion. The companies said there is potential for synergies of $375 million to $400 million. Prologis said it plans to hold about 94% of Duke Realty’s assets and exit one market. “In addition to generating significant synergies, the combination of these portfolios will help us deliver more services to our customers and drive incremental long-term earnings growth,” said Prologis Chief Financial Officer Tim Arndt. Duke Realty’s stock has dropped 24.2% year to date through Friday and Prologis’ stock has shed 30.4%, while the SPDR Real Estate Select Sector ETF has declined 20.5% and the S&P 500 has lost 18.2%.

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