DRE - Duke Realty upgraded to Outperform at BMO on compelling offer from Prologis

BMO Capital Markets analyst John P. Kim upgraded Duke Realty (NYSE:DRE) to Outperform, calling Prologis's (NYSE:PLD) offer for the industrial REIT "compelling." "While REIT investors prefer high-quality companies like DRE to remain public, we believe PLD's offer represents an attractive premium into a better performing stock, with higher earnings power as a combined entity," Kim wrote in a note to clients. He estimated that Prologis's (PLD) offer represents a 29.3% premium to Duke Realty's (DRE) pre-announcement share price, 11.5% premium to current, and a 23.0% premium to DRE's consensus NAV. Blackstone (BX)/Link Logistics would be the most likely competing bidder for Duke (DRE), but is currently working on the €21B recapitalization of Mileway and $7.6B acquisition of PS Business Parks (PSB). If Blackstone (BX) were to pursue DRE, it may have to refinance DRE's $3.375B of unsecured debt at a higher rate, while PLD would likely retain it, Kim said. His

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Duke Realty upgraded to Outperform at BMO on compelling offer from Prologis