Cases & Deals

CalEast acquires CenterPoint Properties Trust for $3.4 billion

Client(s) CalEast Industrial Investors, LLC

Jones Day advised CalEast Industrial Investors, LLC in its $3.4 billion acquisition of CenterPoint Properties Trust. The consideration consisted of $50 in cash per common share.

CenterPoint was a publicly traded real estate investment trust (REIT) and is the largest industrial property company in the 1.4-billion-square-foot Chicago regional market. CalEast is a leading investor in logistics warehouse and related real estate whose members include CalPERS and LaSalle.

The per share purchase price in this transaction represented a 9.1% premium over CenterPoint's closing share price on December 7, 2005, and a 13.1% premium to the average closing price over three months. The total consideration was approximately $3.4 billion, which included the assumption of CenterPoint's debt and preferred stock. CenterPoint's 7.5% Series B convertible preferred shares remained outstanding after the merger, but in accordance with their terms became convertible into the merger consideration, without interest. CenterPoint's Series D Preferred Shares, which were not convertible, continued to be outstanding after the merger as well.

Completion of the transaction occurred in March 2006. CalPERS and Jones Lang LaSalle subscribed to additional equity in CalEast to fund this transaction.