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Canada Pension Plan To Take Parkway Inc. Private In $1.2B Deal

Downtown Houston Skyline
Downtown Houston skyline

Canada’s largest pension fund and a major U.S. real estate owner will acquire Houston-based real estate investment trust Parkway in a $1.2B deal, taking the REIT private.

Canada Pension Plan Investment Board will pay shareholders $19.05/share, in addition to paying shareholders a $4 dividend that will be dispersed before the deal closes, Bloomberg reports. The acquisition will allow CPPIB to expand further into Houston, where Parkway owns 19 office properties that were 88% leased as of March 31. CPPIB also announced plans to focus on U.S. gas and oil buyouts through a $1.25B partnership with Encino Energy.

This $1.2B takeover works out to a 13% premium on Parkway’s June 29 closing price. Should the deal get shareholder approval, it is projected to close in Q4. Among its largest owners, TPG Capital, which has a 9.8% stake in the REIT, plans to vote in favor of the deal.