Mack-Cali, Prentiss Call Off Merger - TheStreet

Updated from 8:18 a. m. EDT

Mack-Cali Realty

(CLI) - Get Report

, a real estate investment trust highly focused on the Northeast region, called off its

deal to buy Dallas-based

Prentiss Properties

( PP) in a stock swap that would have created the country's fourth-largest real estate investment trust, the companies said Friday in a joint statement.

Instead, Prentiss will buy a 270,000-square-foot facility in Austin, Texas, from Mack-Cali for $47.1 million.

Mack-Cali paid a $25 million break-up fee to Prentiss.

"While we still believe in the merits of the merger, the termination of the agreement at this point is in the best interests of both companies," said Thomas August, chief executive officer of Prentiss.

The proposed deal, announced in late June, was not popular with investors. At the time of the announcement, the terms valued Prentiss at a discount to its market price. The terms called for Prentiss shares to be exchanged for a fixed rate of 0.956 Mack-Cali share.

Mack-Cali, based in Cranford, N.J., closed up $1.38, or 5%, to $28.56, while Prentiss closed up 94 cents, or 4%, to $26.13 Friday.