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Starwood to buy Canada's Milestone Apartments REIT in $2.9 billion deal

Reuters
Barry Sternlicht, Chairman and CEO of Starwood Capital Group, speaks at the 2014 Milken Institute Global Conference in Beverly Hills, California April 28, 2014. REUTERS/Lucy Nicholson

(Reuters) - A unit of private investment firm Starwood Capital Group said it would buy Canada's Milestone Apartments Real Estate Investment Trust (MST_u.TO) in a deal valued at about $2.85 billion.

Starwood Capital will pay $16.15 in cash per Milestone Apartments unit, the REIT said.

Based on current exchange rates the offer equates to about C$21.47 per Milestone Apartments unit, which is a premium of 9.2 percent to the unit's close of C$19.66 on Wednesday.

Milestone Apartments' portfolio consists of 78 multifamily residential properties, comprising 24,061 apartment units, located throughout the Southeast and Southwest United States.

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The transaction implies an average price of about $120,000 per apartment unit, the REIT said.

Milestone's legal advisers are Goodmans Llp and Vinson & Elkins Llp, while Starwood's are Stikeman Elliott LLP and Kirkland & Ellis Llp.

BMO Capital Markets is Milestone's financial adviser.

(Reporting by John Benny in Bengaluru; Editing by Savio D'Souza)