American Campus to buy GMH Communities

NEW YORK (Reuters) - Student housing developer American Campus Communities Inc (ACC.N) said on Tuesday it would buy the student housing business of GMH Communities Trust GCT.N for about $1.4 billion to enter new markets and streamline costs.

The transaction includes debt of about $963 million and includes the acquisition of 64 wholly owned student housing properties, as well as a minority interest in eight properties held in two existing joint ventures.

The deal is expected to close in the second quarter of 2008 and does not include GMH's military housing business, which a subsidiary of Balfour Beatty PLC intends to buy.

The combined per-share value of the military housing transaction and the deal with ACC is expected to be about $9.61 per share/unit, based on the closing price of ACC shares on February 11, a 72 percent premium.

ACC shares closed at $28.43 on Monday, while GMH shares closed at $5.59. GMH shares jumped to $8.80 in premarket trading on the New York Stock Exchange.

(Reporting by Chelsea Emery, with additional reporting by Dilipp S. Nag in Bangalore; Editing by Maureen Bavdek)