06 05 2016

Cousins Properties to Merge with Parkway Properties, Spin-off Combined Houston Assets into New REIT

Goldman, Sachs & Co. and J.P. Morgan Securities LLC acted as financial advisors to Cousins Properties, and Wachtell Lipton Rosen & Katz served as legal counsel. The Eastdil Secured group of Wells Fargo Securities, LLC and BofA Merrill Lynch acted as financial advisors to Parkway, and Hogan Lovells US LLP served as legal counsel.


Cousins Properties Incorporated (NYSE: CUZ) and Parkway Properties, Inc. (NYSE: PKY)  entered into a definitive agreement for a $3.66 billion stock-for-stock merger and the simultaneous spin-off of the Houston-based assets of both companies into a new publicly-traded REIT The transactions will result in two independent and internally-managed office REITs: a larger and more diverse Cousins, which will continue its strategy of owning Class A office towers in high-growth urban Sun Belt markets, and a new, well-capitalized HoustonCo seeded with a Class A office portfolio and led by seasoned management team. Under the terms of the agreement, Parkway shareholders will receive 1.63 shares of Cousins stock for each share of Parkway stock they own. Immediately upon the merger's completion, the combined company will effect a taxable spin-off of HoustonCo via a special dividend distributed pro rata to its shareholders. The spin-off will provide investors with the ability to control their asset allocation decision, including the opportunity to invest in a high quality, well-capitalized REIT focused on Houston that is positioned to take advantage of the expected recovery in the energy sector. Upon completion of the spin-off, Cousins and Parkway shareholders will own approximately 52% and 48%, respectively, of both Cousins and HoustonCo. The transactions have been approved unanimously by the Boards of Directors of both companies. Affiliates of TPG, which own approximately 21% of the outstanding common stock of Parkway, have agreed to vote in favor of the transactions. Fried Frank represented Goldman Sachs actiing as financial advisor to Cousins Properties Incorporated with a team including Philip Richter (Picture) and W Benjamin Falk. Involved fees earner: Philip Richter - Fried Frank Harris Shriver & Jacobson; Benjamin Falk - Fried Frank Harris Shriver & Jacobson;

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