W.P. Carey Agrees To Buy CPA:16 - Global In $4 Bln All-Stock Deal

(RTTNews) - W.P. Carey Inc. (WPC) and Corporate Property Associates 16 - Global Inc. have entered into a definitive merger agreement for the real estate investment trust to buy CPA:16 - Global in an all-stock transaction valued at about $4.0 billion.

The deal values the nontraded CPA:16 - Global at $11.25 per share. The exchange ratio will be not more than 0.1842 shares and not less than 0.1447 shares of W. P. Carey common stock for each share of CPA:16 - Global.

The deal is expected to provide liquidity to CPA:16 - Global investors through the issuance of shares in a large, publicly-traded global net-lease REIT.

The $11.25 value reflects a 29 percent premium to the most recent CPA:16 - Global estimated net asset value per share at December 31, 2012.

The transaction has been approved by CPA:16 - Global's Board of Directors after a Special Committee unanimously recommended it. After the merger, W.P. Carey is expected to have an equity market capitalization of $6.5 billion and a total enterprise value of $10.1 billion.

The combined portfolio will consist of more than 700 properties with 86 million square feet of corporate real estate leased to 231 companies globally.

W.P. Carey will continue to manage the Corporate Property Associates and Carey Watermark Investors series of publicly-held, non-traded real estate investment trusts.

As per the merger agreement, CPA:16 - Global may solicit alternative proposals from third parties for 30 days continuing through August 24. The Special Committee, with the assistance of its independent advisors, plans to actively solicit alternative proposals during this go-shop period.

W.P. Carey currently expects that the deal will allow the combined company to increase its annualized dividend to a minimum of $3.52 per share, which will provide CPA:16 - Global's yield-oriented investors with continued income.

Barclays is acting as financial advisor to CPA:16 - Global while Clifford Chance LLP is its legal advisor. Pepper Hamilton LLP is acting as legal advisor to the Special Committee of the Board of Directors of CPA:16 - Global.

BofA Merrill Lynch is the financial advisor to W.P. Carey and DLA Piper US LLP is its legal advisor.

WPC closed at $67.81 on Thursday.