All-cash offer made by Welltower for Healthcare Realty Trust

Well tower Inc.,

IS FINE 0.63%

A large healthcare-focused real estate investment trust that bids nearly $5 billion in all-cash for

Healthcare Realty Trust Inc.

Personnel 7.57%

as soon as the smaller REIT agrees merge with an opponent earlier this year, according to people familiar with the matter.

Welltower remains interested after its bid was rejected and plans to talk more with Healthcare Realty this week, the people said.

Healthcare Realty and

Healthcare Trust of America Inc.

HTA -4.51%

agreed on February 28 to incorporate in a deal worth about $10 billion mostly in shares. A month later, Welltower offered $31.75 a share to Healthcare Realty, or about $4.8 billion, the people said. Toledo, Ohio-based Welltower, with a market value of about $41 billion, has a portfolio of luxury homes, rehabilitation centers and medical offices. The acquisition of Nashville, Tenn.-based Healthcare Realty will expand its presence in its specialized, medical office buildings.

In a regulatory filing on Monday detailing how the current deal comes together,

Healthcare Trust

noted the presence of other parties suing for Healthcare Realty including one it called “Party F” and detailed its bid.

The non-binding offer is subject to a thorough due diligence that Welltower has prepared for prompt completion, according to residents and records. It will be financed by Welltower’s cash and a fully committed bridge loan, and Welltower is also offering to pay the $163 million termination fee Healthcare Realty will owe when it exits.

Healthcare Trust.

Healthcare Realty’s board of directors concluded the bid was not superior to the agreement with the Healthcare Trust and rejected it on March 30, the filing said.

Healthcare Realty shares jumped 7.6% to $30.71 on Tuesday after The Wall Street Journal reported Welltower’s interest, while Healthcare Trust shares closed down 4.5% in the US. $28.61 level. That comes after stocks moved in those directions following Monday’s filing, suggesting that investors are losing confidence in current trading. Welltower shares were little changed.

Healthcare Trust shareholders will receive one Healthcare Realty share and $4.82 cash per share under the current arrangement. When the deal was announced, the companies said they valued the Healthcare Trust at around $35.08 a share.

It requires signatures from holders of two-thirds of Healthcare Realty’s shares in a vote scheduled for July. Healthcare Realty is expected to report first-quarter earnings on Thursday, while Welltower reports next week.

The current deal is the culmination of a months-long sales process for Healthcare Trust, which was announced by activist investor Elliott Management Corp. urge to learn a purchase transaction.

Monday’s filing notes that Party F – now known as Welltower – was among those who sought out an arrangement for the Healthcare Trust late last year but decided not to proceed. It remained engaged as a potential source of capital or wealth management for another suitor, the filing said.

Write letter for Cara Lombardo at [email protected]

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Appears on 4 May 2022, print edition as ‘Cash Offer made by Welltower Made for A REIT.’

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