Spirit Realty Capital Inc.’s stock was up by 7% in premarket trading on Monday after it agreed to be acquired by Realty Income Corp. in a deal that values the Dallas-based real estate investment company at $9.3 billion.
Realty Income’s stock
O,
was down 2% in premarket trading.
Realty Income has agreed to pay 0.762 newly issued Realty Income common shares for each Spirit Realty Capital
SRC,
common share.
The deal comes one trading day after Spirit Realty’s stock closed at a three-year low.
Based on closing prices on Friday, the deal values Spirit Realty at $37.34 a share, a 15.4% premium over its $32.35-a-share close on Friday.
Realty Income is buying Spirit Realty’s portfolio of 2,064 retail and industrial properties in 49 states. Spirit had a 99.8% occupied rate as of June 30.
About 39% of Realty Income’s portfolio is in service retail, while about 26% is industrial and about 15% in discretionary retail space. About 3% of its portfolio is office space, which has been impacted by lower demand due to employees working from home in the wake of the COVID-19 pandemic.
Realty Income said the deal will provide it with more than 2.5% accretion to its annualized adjusted funds from operations, or AFFO, per share.
Realty Income shareholders will own 87% of the combined company which will have a value of $63 billion. Spirit Realty shareholders will hold 13%.
The two-real estate companies expect the deal to close during the first quarter.
Also read: Blackstone sells Bellagio stake to Realty Income Corp. in post-COVID rebound
