Private equity firm Blackstone Group has agreed to buy commercial real estate company CarrAmerica Realty Corp. for $5.6 billion to give it a platform for future investments in the office sector, the companies said on Monday.
Blackstone will acquire all CarrAmerica shares for $44.75 each, which represents a premium of nearly 9 percent over CarrAmerica's closing stock price of $41.08 on Friday.
CarrAmerica said in a statement that it would pay its regular quarterly dividend for the quarter ending March 31 but would not pay any dividends on common stock after that.
CarrAmerica's board has unanimously approved the deal and recommended that shareholders also approve it, The transaction is expected to close in the second quarter.
"(This) will provide us with a valuable platform for future investments in the office sector," Jonathan Gray, senior managing director of The Blackstone Group, said in a statement.
CarrAmerica owns, develops and operates office properties in 12 markets throughout the United States. CarrAmerica and its affiliates own, directly or through joint ventures, interests in a portfolio of 285 operating office properties totaling 26.3 million square feet.
Goldman Sachs & Co. acted as financial adviser to CarrAmerica.
Citigroup, Bank of America and Deutsche Bank acted as financial advisers to Blackstone.
Acquisition financing is being provided to Blackstone by Deutsche Bank, Bank of America and Citigroup.
