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Duke Realty is set to be acquired by Prologis in a $25.6B megadeal, but when the Indianapolis-based real estate investment trust's board voted to be sold to its West Coast competitor, its CEO said it was one of his lowest moments.
“Worst [expletive] day of my life,” Duke CEO Jim Connor told the Indianapolis Business Journal about informing his staff that the company was being sold, adding that it was the right business decision.
Some 300 Duke employees are set to lose their jobs as a result of the acquisition, the IBJ reported, although the final number isn't yet clear. Many of the employees at Duke have been with the firm for 30 years. Duke submitted the IBJ story as a filing with the Securities and Exchange Commission.
The REIT notified the Indiana Department of Workplace Development this week that it is laying off 120 workers in the state as a result of the move.
“I was standing there, with a 50-year anniversary banner across the front of the building at my back, talking to our team — people that I’ve known for [decades] and people that had built this company and done all the incredible heavy lifting," Connor said. "I had to stand up and tell them that the decision had been made and that it was going to happen.”
Connor will be joining Prologis as a vice president. Some 40 Duke employees are joining Prologis on a permanent or temporary basis, according to the IBJ.
“Our employees are all shareholders, so they’ll see the benefit,” Connor told the IBJ. “We also went to extreme lengths to make sure that all of our associates were treated very generously, in terms of their severance, to the point of where nobody needs to rush out and get a job.”
Prologis aggressively pursued Duke, proposing multiple offers that were rejected before reaching a deal in June valuing the company at nearly $26B, including debt. Duke shareholders will receive 0.475 shares of Prologis for each share in Duke they own when the transaction closes, which is likely to happen next quarter. The shareholder vote is scheduled for later this week.
The company intends to put its headquarters building in Indianapolis, Keystone at the Crossing, on the market next year, the IBJ reports.
In buying Duke, Prologis will add 165M SF of assets, all in the U.S., to its global portfolio, which reached 1B SF last year. Prologis plans to exit one of Duke's markets but hold onto 94% of its portfolio.
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