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Brookfield, Blackstone to Buy Trizec

The deal is valued at $8.9 billion.
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Brookfield Properties


and Blackstone Group agreed to buy office real estate investment trust

Trizec Properties


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and its Canadian counterpart in a deal valued at $8.9 billion.

The Brookfield and Blackstone joint venture will pay $29.01 a share for Trizec Properties, and will buy the voting shares of Trizec Canada for $30.97 a share. The price for Trizec Properties represents an 18% premium over the REIT's closing price of $24.60 Friday, while the price for Trizec Canada is a 30% premium over the company's close on the Toronto Stock Exchange Friday.

Chicago-based Trizec Properties has ownership interests in and manages 61 office properties. Brookfield will manage its properties in New York, Washington, D.C., downtown Los Angeles and Houston. Blackstone will take on properties in West Los Angeles, San Diego and certain New York City areas.

The venture will be financed with property and corporate debt, $1.3 billion in equity from Brookfield and institutional partners, with the balance of the equity by Blackstone.

Trizec shares recently shot up $4.06, or 17%, to $28.66. Brookfield shares fell 57 cents, or 1.8%, to $30.41.