Spirit Realty’s stock rallies on $9 billion buyout by Realty Income Corp.

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,
-1.59%

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,
-2.24%

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

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