Shareholders of Corporate Property Associates 17 – Global Inc. and W.P. Carey Inc. (NYSE: WPC) will soon vote on the proposed merger that was announced earlier this summer. CPA:17 is a publicly registered non-traded real estate investment trust sponsored by W.P. Carey, publicly traded REIT. CPA:17 plans to merge with W. P. Carey in a stock-for-stock transaction valued at approximately $6 billion. With shareholder approval, the merger is expected to close around December 31, 2018.
Stockholders are scheduled to vote on October 29, 2018 at the offices of DLA Piper LLP in New York City. CPA:17 stockholders will vote at 3:00 p.m., and W. P. Carey stockholders will vote at 4:00 p.m. local time.
If approved, CPA:17 stockholders will receive a fixed exchange ratio of 0.160 shares of W. P. Carey common stock for each share of CPA:17, equivalent to $10.65 per share based on W. P. Carey’s closing share price of $66.58 on August 31, 2018. Shares of CPA: 17 common stock originally sold for $10.00 each and have an annual distribution rate of 6.5 percent. W. P. Carey expects to issue approximately 53.9 million shares common stock in connection with the merger.
Post-closing, W. P. Carey is expected to have a pro forma equity market capitalization of approximately $11 billion and an enterprise value of approximately $17 billion. CPA: 17 stockholders will own approximately 33 percent of the combined company, and W.P. Carey expects to maintain its current quarterly dividend of $1.02 per share.
W. P. Carey, one of the largest net lease REITs, has an enterprise value of more than $10 billion and a portfolio of commercial real estate totaling 886 properties. The company invests in single-tenant industrial, warehouse, office and retail properties with long-term leases with built-in rent escalators. Its portfolio is located primarily in North America and Northern and Western Europe.
In June 2017, the W.P. Carey board approved a plan to exit all non-traded retail fundraising activities to focus exclusively on net lease investing for the company’s balance sheet. W.P. Carey’s managed programs include non-traded REITs, non-traded business development companies, and private funds.
CPA:17’s offering was declared effective by the SEC in November 2007 and closed in January 2013 after raising nearly $3 billion in investor equity. The company’s $4.8 billion portfolio consists of 449 properties, according to Summit Investment Research.