Chateau, ROC Agree to Merge In $300 Million Stock Swap
March 31, 2011
Codi TOWNSHIP, Mich. -- Chateau Properties Inc., said it agreed to merge with ROC Communities Inc., another owner of manufactured housing communities, in a stock swap valued at about $300 million. The new company, to be called Chateau Communities Inc., will be the largest manufactured housing real estate investment trust, with a market capitalization of about $640 million. Terms of the deal call for Chateau shareholders to receive one share of the new company for each existing Chateau share. ROC Communities shareholders will receive 1.042 shares of the new company for each of their shares. Chateau currently has a market capitalization of about $344 million, when closely held units are taken into account, and ROC Communities has a market capitalization of about $285 million. Shares of Chateau Properties closed at $23.125, up 87.5 cents, and ROC Communities closed at $23, up $1, in New York Stock Exchange composite trading Thursday. ``The larger companies in the REIT world trade at higher multiples, so this will increase the value of our stock, as more pension funds get in,'' said Chateau president C.G. Gant, who will serve as president of the new company. ``The money we save by running just one public company will be put into new development.'' The merged company will be headquartered in Englewood, Colo., ROC Communities' current headquarters. Johnetta Coates, Chateau's chairman, will retain that post. Gay Bush, ROC Communities' chairman and chief executive, will serve as chief executive.
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