W. P. Carey Inc. WPC, -0.44%, a net lease real estate investment trust, said Monday it has agreed to merge with Corporate Property Associates 18 — Global Inc. in a deal valued at about $2.7 billion, including the assumption of debt. The deal is expected to close in the third quarter. Under the terms of the deal, CPA:18 shareholders will receive 0.098 of a W. P. Carey stock and $3 in cash for each share owned. That’s equal to $10.45 a share based on the trailing three-day volume-weighted average price for W. P. Carey common stock on Friday of $76.17. The REIT will fund the cash portion of the deal using the proceeds from sales of certain CPA:18 assets before the deal closes and existing liquidity. Once the deal closes, W. P. Carey will own about 93% of the combined company. The deal is expected to immediately boost real estate adjusted funds from operations per share, and offset the loss of more than half of the earnings contribution from income earned for managing CPA:18. It will also add a “well-diversified and high-quality net lease portfolio that enhances certain portfolio metrics,” the companies said in a statement. It will further add a portfolio of operating self-storage assets and will conclude W. P. Carey’s exit from investment management. W. P. Carey shares have gained 13% in the last 12 months, while the S&P 500 SPX, -0.75% has gained 15%.
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