Barclays commented on the announced merger between Post Properties Inc PPS and Mid-America Apartment Communities Inc MAA.
Post Properties announced it would merge with Mid-America in a transaction that is expected to close in 4Q16.
"Under the terms of the combination, each PPS shareholder will receive a fixed exchange ratio of 0.71 shares of MAA; to that end, the value of PPS is now largely a function of MAA's share price," wrote Barclays, mentioning that Mid-America shareholders appear relatively pessimistic on the deal, based on market reaction. Since the transaction was announced, shares are down nearly 8 percent.
The analysts also note that the merger will create the largest REIT Owner of apartment units in the US.
Barclays reiterated its Equal-Weight rating, raising the price target to $65 from $64.
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