Vivian D. Labbe
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Vivian D. Labbe in Mergers & Acquisitions,

Oppenheimer's First Take On Mid-America's Post Properties Purchase

Mid-America Apartment Communities Inc 's deal to buy Post Properties Inc  is appealing to Oppenheimer for four reasons:

    1. "The strong market overlap should give MAA added depth."
    2. "We believe assets are 10-15% cheaper in the public than private market."
    3. "PPS's same-store operating metrics have lagged MAA's recently."
    4. "Finally, we believe MAA will successfully integrate the acquisition having cut its teeth with the 2014 acquisition of Colonial Properties."

Analyst Steve Manaker noted that at 0.71 shares of Mid-America for each share of Post Properties, the deal values the latter's real estate assets at about $4.7 billion, or $230,000/unit. The common stock portion is about $3.9 billion ($72.52/share) and represents a 16.6 percent premium to Friday's close of $62.22/share.

The combined company is expected to have a pro forma equity market capitalization of about $12 billion and a total market capitalization of about $17 billion.

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