VEREIT Inc. (NYSE: VER) was up 18.88% at $49.05 in premarket trading as of last check. VEREIT stock closed the last session at $41.26, almost stable with a bit decline of -0.15% or -$0.06. Over the course of the day, VER fluctuated between $41.19 and $41.65. VER stock rose this morning on news of a merger.
The merger deal in brief:
VEREIT is an industry leader in real estate operations that specializes in single-tenant, multi-tenant, and infrastructure assets. VER’s current real estate portfolio includes approximately 3,800 properties and 89.5 million square feet of investment real estate totaling $14.6 billion. A key feature of VER’s approach is that it offers long-term leases on properties in exchange for equity capital provided by creditworthy corporations.
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VEREIT and Realty Income Corporation (NYSE:O) announced today that the two companies have entered a definitive merger agreement.
- The agreement provides for the acquisition of VEREIT by Realty Income in an all-stock transaction creating a combined company that will have an estimated enterprise value of $50 billion.
- A dividend of 0.705 shares of Realty Income shares for each share of VER stock is included in the transaction under the terms of the agreement.
- After the closing, both companies anticipate effecting the formation of a new, self-managed, publically traded REIT (“SpinCo”) from substantially all of their office property holdings.
- Realty Income will remain the surviving public entity following the merger and spin-off.
- Realty Income and former VEREIT shareholders are estimated to own approximately 70% of Realty Income and 30% of SpinCo.
What VER deal will bring?
With the acquisition of VEREIT (VER) and the formation of SpinCo, Realty Income expects the transactions to result in over 10% AFFO growth per share in year one, adding new growth opportunities directly to the diversified portfolio, strengthening cash flow durability, and allowing significant financial synergies, particularly through options for debt refinancing.