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Prologis makes $24B offer to acquire Duke Realty

INDIANAPOLIS (Inside INdiana Business) — San Francisco-based logistics real estate firm Prologis Inc. (NYSE: PLD) has made a public proposal to Duke Realty Corp. (NYSE: DRE) Chief Executive Officer James Connor to acquire the Indianapolis-based firm in an all-stock deal valued at nearly $24 billion. Prologis CEO Hamid Moghadam says his company has unsuccessfully tried to privately make a deal since November.

Prologis says under the terms of its proposal, Duke Realty stockholders would receive 0.466 shares of Prologis common stock for each share of Duke Realty stock they own. The proposal values Duke Realty stock at $61.68 per share based on Prologis’ closing price on May 9, which represents a premium of 29% to Duke’s closing price on the same date.

Prologis says Duke Realty shareholders would own 19% of the combined company.

“We are confident that the proposed combination will be a win-win for our respective shareholders,” Moghadam said in written remarks. “Prologis has a proven track record serving as a leader and innovator in our industry. We are known for providing exceptional service to customers and delivering superior value for our shareholders, including the shareholders of companies we have merged with or acquired in the past. We have no doubt that Duke Realty’s shareholders would similarly benefit from long-term value created by the combination of our companies.”

Prologis says it sent its first letter to Duke Realty on November 29 of last year proposing a 0.465 exchange ratio, which represented a 20% premium to Duke’s stock price at the time.

The company increased its proposed exchanged ratio on May 3, which represented a 34% premium to Duke’s stock price at the time, but Prologis says Duke rejected the proposal that same day.

In a public letter to Connor, Modhadam said the company would prefer to continue working privately to close the deal, but concluded that a public approach would be more constructive.

“The terms we are proposing provide Duke Realty shareholders with the opportunity to participate in the growth and upside potential of the combined company, while also delivering an immediate, substantial, and compelling premium,” Moghadam said in the letter. “Based on the clear strategic and financial benefits outlined below, we are highly confident the addition of your assets to our platform will deliver superior value to the shareholders of both companies over the long term.”

Duke did not immediately respond to a message from our partners at the Indianapolis Business Journal seeking comment on the offer.