Realty Income (O.N) said on Monday it would buy Spirit Realty Capital (SRC.N) in an all-stock deal valued at $9.3 billion as it looks to expand its real estate portfolio.
The announcement of the deal, which sent shares of Spirit Realty up 13% in premarket trading, comes at a time when the U.S. commercial real estate faces pressure from tightening financial conditions and a deteriorating economic outlook.
The combined portfolio is expected to result in reduced rent concentration for Realty Income's clients, while increasing the combined portfolio's annualized contractual rent from $3.8 billion to $4.5 billion, Realty Income said. Under the terms of the agreement, Spirit shareholders would receive $37.34 per share, a premium of 15.4% from the stock's last close, valuing the real estate investment trust at $5.28 billion, according to Reuters calculations.
Wells Fargo is the financial adviser to Realty Income, while J.P. Morgan Securities and Morgan Stanley & Co are serving as financial advisers to Spirit Realty.
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