Shareholders of Phillips Edison & Company Inc. (PECO) and Phillips Edison Grocery Center REIT II Inc. will soon vote on the proposed merger that was announced last month.
PECO, an internally-managed real estate investment trust, and Phillips Edison Grocery Center REIT II, a publicly registered non-traded REIT it currently advises and manages, agreed to merge in a 100 percent stock-for-stock transaction valued at approximately $1.9 billion.
If approved, the merger will create a $6.3 billion REIT focused on grocery-anchored shopping centers, that will own and operate 321 grocery-anchored shopping centers with more than 36.6 million square feet located across 33 states.
PECO stockholders will vote at the offices of Latham & Watkins LLP, located at 885 Third Avenue in New York City on November 14, 2018 at 8:00 a.m. Eastern Time.
Phillips Edison Grocery Center REIT II will vote at the same location on November 14, 2018 at 1:00 p.m. Eastern Time.
In exchange for each share of Phillips Edison Grocery Center REIT II common stock, shareholders will receive 2.04 shares of PECO common stock, which is equivalent to $22.54 per share based on the most recent estimated net asset value per share of $11.05. Phillips Edison Grocery Center REIT II has a NAV per share of $22.80.
The boards of both REITs have unanimously approved the transaction. At closing, two of the three Phillips Edison Grocery Center REIT II independent directors will join the board of the combined company, which will consist of seven directors. The transaction is expected to close in the fourth quarter of 2018, if approved.
Phillips Edison & Company Inc. (formerly known as Phillips Edison Grocery Center REIT I Inc.) is one of the nation’s largest owners and operators of grocery-anchored shopping centers. As of the second quarter of 2018, the company’s $3.7 billion portfolio was comprised of 235 properties, according to Summit Investment Research. The offering was declared effective by the SEC in August 2010 and raised approximately $1.8 billion in investor equity before closing in February 2014.
Phillips Edison Grocery Center REIT II Inc. invests in well-occupied grocery-anchored neighborhood shopping centers with a mix of national and regional retailers selling necessity-based goods and services, in strong demographic markets throughout the United States. As of March 31, 2018, the company owned a $1.9 billion retail portfolio consisting of 86 grocery-anchored shopping centers totaling approximately 10.3 million square feet. The company’s initial public offering launched in November 2013 and closed in September 2015 after raising $1.1 billion in investor equity.