Key Takeaways:
Brookfield Asset Management and Canada Pension Plan Investment Board agreed to acquire LXP Industrial Trust for $61.20 a share in cash, valuing the industrial REIT at about $5.2 billion including debt.
"The LXP Board unanimously determined that this transaction with Brookfield and CPP Investments fully maximizes value for our shareholders," said Thomas W. Eglin, Jr., chairman and chief executive officer of LXP.
The purchase price represents a 12.3% premium to LXP's 30-day volume-weighted average price and a 19.8% premium to the 90-day VWAP, both measured through July 17. LXP owns about 53 million square feet across 108 warehouse and logistics properties in Sunbelt and Midwest markets, with strong occupancy and long-duration leases. The deal is not subject to a financing condition.
The acquisition underscores institutional appetite for U.S. industrial real estate, where e-commerce growth and supply-chain restructuring have driven demand for modern logistics facilities. LXP shares will cease trading on the New York Stock Exchange after closing, expected in the fourth quarter, pending shareholder approval and customary conditions.
LXP has agreed to a 40-day "go-shop" period through Aug. 28, allowing its advisors — BofA Securities as lead and J.P. Morgan as co-financial — to solicit alternative bids. The company may terminate the deal for a superior proposal subject to a termination fee and negotiation rights in favor of the buyers. There is no assurance the process will yield a higher offer.
The buyers, advised by Citigroup and Morgan Stanley, are acquiring a portfolio that LXP transformed over several years from a diversified REIT into a pure-play industrial landlord. The company's development pipeline and Class A assets in high-growth Sunbelt markets were key draws, according to Lowell Baron, chief executive officer of Brookfield Real Estate.
"The industrial sector, particularly in the U.S., continues to offer attractive long-term investment opportunities, supported by structural demand drivers including domestic manufacturing, evolving global supply chains and population growth across key Sunbelt markets," said Sophie van Oosterom, managing director and head of real estate at CPP Investments.
LXP has suspended common share dividends until the deal closes or the agreement terminates. The company still plans to report second-quarter results on July 29 but will not host a conference call. Analysts had issued a range of price targets on LXP in recent months, with BMO Capital's John Kim at $65, Evercore ISI's Sheila McGrath at $53 and J.P. Morgan's Anthony Paolone at $49.
This article is for informational purposes only and does not constitute investment advice.
