Associated Estates to sell itself as investor piles pressure

Wed Apr 22, 2015 11:22am EDT
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(Reuters) - Associated Estates Realty Corp AEC.N agreed to be bought by Canada's Brookfield Asset Management Inc (BAMa.TO: Quote) for about $1.66 billion, months after activist investor Jonathan Litt asked for a sale of the U.S. real estate investment trust.

Litt said on Wednesday this deal was an "outstanding outcome for all shareholders."

Litt's Land & Buildings Investment Management LLC said in June the trust's apartment portfolio was not best-suited for public markets and the company should sell itself to Litt's firm or another buyer.

Land & Buildings owns a 2.23 percent stake in the trust, according to Thomson Reuters data.

The offer of $28.75 per share is at a premium of 17.4 percent to Associated Estates' Tuesday closing price.

The deal is valued at $2.5 billion, including debt, the company said.

Associated Estates' portfolio includes 49 apartment communities containing 12,734 units across eight states in the U.S. Midwest. The units are owned either directly or through subsidiaries.

Toronto-based Brookfield Asset Management, which owns a vast portfolio of real estate, energy and infrastructure assets, said on Monday it was raising $1.1 billion by issuing shares to help fund some deals.

The deal for Associated Estates is expected to close in the second half of the year, Brookfield Asset Management said.   Continued...

People walk to Brookfield Place off Bay Street on the day of the annual general meeting for Brookfield Asset Management shareholders in Toronto, May 7, 2014.   REUTERS/Mark Blinch