Mid-America to Buy Post Properties for $4 Billion in Stock in REIT Mega Merger

house-1172352-640x480Mid-America Apartment Communities Inc (NYSE:MAA) will acquire fellow apartment REIT Post Properties Inc (NYSE:PPS) for $4 billion in stock, according to the Wall Street Journal.

From MarketWatch via WSJ:

Post investors are to get 0.71 share of new MAA stock for each share they own in a deal that could be announced Monday, people familiar with the matter said.

On Friday, Post had a market valuation of $3.3 billion, while MAA’s was nearly $8 billion. Shares of both companies have soared in recent years as investors have been drawn to their relatively rich payouts with interest rates at historic lows.

The new mega-REIT will boast over 105,000 apartment units across 317 properties, making it the biggest multifamily REIT ever.

PPS has gained 5.16% year-to-date, while MAA is up 12.49%. Investors can expect PPS shares to soar in premarket trading Monday, however: the buyout value of the deal is a 22% premium over Post’s Friday closing price of $62.22.

REITs have been a popular place for yield-seeking investors over the past several years, with the fixed income market offering record low yields. The Vanguard REIT Index Fund (NYSE:VNQ), which invests in a wide swath of the real estate investment trust world, has risen 13% since the start of 2016.


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