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Parkway Properties Agrees to Merger with Thomas Properties Group, Thomas Holders to Get 0.3822/Share Parkway for Implied $6.26/Share

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Thomas Properties Group to Move to New York Stock Exchange

Parkway Properties, Inc. (NYSE: PKY) ("Parkway") and Thomas Properties Group, Inc. (NYSE: TPGI) ("Thomas Properties") announced today that they have signed a definitive merger agreement pursuant to which Thomas Properties will merge with and into Parkway in a stock-for-stock transaction valued at approximately $1.2 billion. The merger agreement was unanimously approved by the board of directors of each company following receipt of fairness opinions, and the transaction is expected to close by the end of the fourth quarter of 2013, subject to the approval of stockholders of both companies, receipt of certain third party consents and other customary closing conditions.


Under the terms of the merger agreement, Thomas Properties' shareholders will receive 0.3822 shares of newly issued Parkway common stock in exchange for each share of Thomas Properties common stock, for an implied price per share of $6.26 based on Parkway's closing stock price of $16.37 on September 4, 2013.    

Upon completion of the transaction, Parkway will assume Thomas Properties' ownership interest in two office properties in Houston, Texas and five office properties in Austin, Texas. In addition, Parkway may take ownership of three assets in Northern Virginia that secure debt that is presently subject to special servicing and are expected to be liquidated before or shortly after the closing of the transaction. Parkway also has separately reached an agreement with Brandywine Realty Trust (NYSE: BDN) ("Brandywine") to sell substantially all of Thomas Properties' ownership interest in two office properties located in Philadelphia, Pennsylvania known as Commerce Square, based on an agreed-upon property value of $332 million, which sale will close concurrent with and be subject to the closing of the merger transaction. Additionally, Parkway has agreed to sell Thomas Properties' Four Points Centre and a contiguous land parcel located in Austin, Texas to Brandywine for $51 million, subject to the successful completion of due diligence by Brandywine and other customary closing conditions. 

Parkway intends to assume approximately $752 million of Thomas Properties' pro rata share of in-place secured debt, which will be reduced to approximately $530 million following the completion of the planned asset sales in connection with the transaction. Furthermore, Parkway intends to provide Thomas Properties with a bridge loan totaling up to $80 million to partially fund its required net equity contribution of approximately $163 million in connection with the liquidation of its joint venture with The California State Teachers' Retirement System ("CalSTRS"), which is expected to be consummated in late September 2013. 

Upon consummation of the merger, James A. Thomas, President and Chief Executive Officer of Thomas Properties, will become Chairman of Parkway's board of directors, and Parkway's board of directors will be expanded to 10 members.

Posted-In: News M&A


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