San Jose-based Bay Apartment Communities Inc. said it will buy Avalon Properties Inc. for about $1.72 billion in stock and debt, to form one of the largest luxury apartment companies in the United States. Avalon shareholders would receive 0.7683 of a Bay share, or about $28.42 a share, about 40 cents less than its closing price Friday. Wilton, Conn.-based Bay Apartment will assume about $500 million in debt. The new company, to be named Avalon Bay Communities Inc., would have a portfolio of 40,506 apartment homes in 15 states and the District of Columbia. The boards of both companies have approved the purchase, which is expected to close in June. Avalon Bay Communities would be based in Alexandria, Va., with regional offices in San Jose and Wilton.
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