Columbia Property Trust Agrees to $19.30-Share Pimco Bid

By Dan Weil

Shares of Columbia Property Trust  (CXP Get Columbia Property Trust, Inc. Report jumped Tuesday, as the office-building REIT agreed to be acquired by funds managed by Pimco for $19.30 cash a share.

The deal value including debt is $3.9 billion.

Columbia Property Trust shares recently traded at $19.16, up 16%.

The bid price is a premium of 27% over the New York company's unaffected closing share price on Friday, March 12. 

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Columbia last spring said the board launched a strategic review, inviting "nearly 90 potential counterparties to participate, including strategic acquirers, private equity firms and other investment management firms."

Barron's reported on March 19 that a group led by Arkhouse Partners had bid $19.50 a share for Columbia.

In a Tuesday statement, John Murray, Pimco’s global head of private commercial real estate, said, “We continue to believe that high-quality office buildings in major U.S. cities offer long-term value for our clients.

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“Columbia has assembled a modernized, well-located portfolio of assets that we expect will perform well in the years ahead.”

Columbia sees the deal closing as early as year-end, subject to approval by its holders. 

Boston Properties  (BXP Get Boston Properties, Inc. Report is the country’s largest office REIT. Morningstar analyst Kevin Brown liked its second-quarter earnings report.

“We believe that the second-quarter results are especially encouraging within the current context, and the recent acquisitions demonstrate management’s conviction about the expected recovery in the office market,” he wrote in July.

“The office utilization rates have shown some improvement over the last quarter, with companies encouraging their employees to return to the office. But the convenience of working from home and the recent spike in coronavirus cases have resulted in a markedly slow transition.”

Brown puts fair value at $108 for the stock. It recently traded at $114.

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