$4B Winner In Monmouth Bidding Neither Zell Nor Sternlicht

Industrial Logistics Properties Trust has inked a deal to acquire the much-sought-after Monmouth Real Estate Investment Corp. for $4B, including the assumption of $409M of debt. ILPT will pay $21 for each share of Monmouth, whose shares closed at $18.86 apiece on Thursday.

Provided the sale is approved by Monmouth shareholders, ILPT will thus be the dark horse winner in a contest that has seen Sam Zell's Equity Commonwealth and Barry Sternlicht's Starwood Capital Group vie for ownership.

Last December, Blackwells Capital, a large Monmouth shareholder, offered to buy the company for $18 per share in cash, but Monmouth didn't pursue that bid.

In May, Monmouth's board agreed to be acquired by Equity Commonwealth in an all-stock transaction that valued Monmouth at $19.40 per share. Monmouth shareholders later rejected the deal.

Starwood then put in an all-cash bid that amounted to $19.51 a share, minus a fee to terminate the transaction with Equity, but Monmouth hasn't acted on that bid.

Monmouth's portfolio includes 126 single-tenant, net-leased e-commerce-oriented industrial facilities totaling about 26M SF in 32 states. The average remaining lease term across the portfolio is about eight years.

Newton, Massachusetts-based ILPT’s portfolio consists of more than 290 industrial properties totaling about 36M SF leased to more than 260 tenants in 33 states.

ILPT says it will partly finance the deal in equity partnerships with one or more institutional investors, so it doesn't plan to issue any new common shares. The REIT might also sell as much as $1.6B worth of Monmouth properties to help pay for the rest, depending on how large the JV equity investments are.

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