Summary
Realty Income Corporation (O) has filed an 8-K report announcing a material definitive agreement for a merger with VEREIT, Inc. This transaction is structured as a merger of VEREIT and its operating partnership into Realty Income subsidiaries. Upon closing, VEREIT common stock will be converted into Realty Income common stock at an exchange ratio of 0.705. VEREIT Series F Preferred Stock will be redeemed, and VEREIT Series F Preferred Units will be converted into a cash redemption amount. The transaction is expected to close in the fourth quarter of 2021 and is subject to customary closing conditions, including shareholder approvals and regulatory filings. The agreement also outlines provisions for equity award conversions, potential governance changes, and a contemplated spin-off of office properties into a separate REIT post-merger. Termination fees and expense reimbursement clauses are also detailed.
Key Highlights
- 1Realty Income enters into a Merger Agreement to acquire VEREIT, Inc.
- 2The acquisition will be an all-stock transaction with an exchange ratio of 0.705 shares of Realty Income for each share of VEREIT common stock.
- 3VEREIT's Series F Preferred Stock will be redeemed, and its operating partnership's Series F Preferred Units will be redeemed for cash.
- 4A significant component of the deal includes a planned spin-off of VEREIT's office properties into a new, publicly traded REIT (OfficeCo) after the merger.
- 5The transaction is anticipated to close in the fourth quarter of 2021, subject to shareholder approvals and other closing conditions.
- 6The Merger Agreement includes provisions for the appointment of two VEREIT directors to Realty Income's board post-merger.
- 7Customary representations, warranties, covenants, non-solicitation obligations, and termination fees are part of the agreement.