In a major development, Cousins Properties Incorporated (CUZ - Analyst Report) , the Atlanta, GA-based real estate investment trust (“REIT”) declared the completion of the previously announced merger with Parkway Properties, Inc. (PKY - Snapshot Report) . This stock-for-stock merger deal worth more than $2 billion has allowed Cousins to exit the Houston office market crippled by the decline in oil prices.
Notably, at April end, Cousins and Parkway Properties inked a definitive merger agreement and the simultaneous spin-off of the Houston-based assets of both companies into a new publicly traded REIT (“HoustonCo”). Though Cousins’ portfolio has performed comparatively well in Houston, the deal was inked to free up the stock price of both companies from the uncertainty prevailing in the Houston market.
At the end of August, the merger deal received approval from stockholders of both companies by an overwhelming majority. Thereafter, last month, Cousins declared the anticipated closing date of the merger and fixed Oct 6, 2016 for the spin-off, with the following day scheduled for the distribution. (Read more: Cousins Declares Anticipated Closing Date of Parkway Merger ).
With yesterday’s closure, the merger has actually fructified per schedule. The completion of the spin-off of the Houston properties of the combined company into a separate publicly-traded REIT called Parkway, Inc. (“New Parkway”) is slated for today (Oct 7, 2016).
Cousins focuses on acquisition, ownership, development and management of upscale office and mixed-use properties throughout the Sunbelt markets of the U.S., with special focus on Georgia, Texas and North Carolina. The merger will bolster the company’s presence in Atlanta, Austin and Charlotte, and offer it the chance to operate in Phoenix, Orlando and Tampa.
Both Cousins and Parkway carry a Zacks Rank #3 (Hold). The long-term projected growth rates of these two companies are 2.8% and 8%, respectively.
A couple of better-ranked stocks in the same space include CorEnergy Infrastructure Trust, Inc. (CORR - Snapshot Report) and Crown Castle International Corp. (CCI - Analyst Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Current-quarter estimates for CorEnergy Infrastructure Trust and Crown Castle International remained stable at $1.16 and $1.13 per share, over the last month.
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