The transaction represents a 4% premium to Annaly’s original proposed price of $12.50 per share in November, and values CreXus at $996 million and Annaly anticipates that it will pay a total consideration of $872 million in the transaction.
CreXus expects to declare and pay regular quarterly dividends while the transaction is pending and Annaly has agreed to increase the cash purchase price per share to reflect a pro-rated quarterly dividend for the quarter in which the tender offer is closed.
Under the agreement, after March 16, an Annaly subsidiary will commence the tender offer for the outstanding CreXus shares, in which there must be a minimum tender of 51% of shares and customary conditions must be satisfied in order for this portion of the deal to go through.
If completed, there would then be a cash merger of any remaining shares into the right to receive the same cash consideration as in the tender offer. CreXus currently expects the tender offer to expire in mid-April and the merger to close as soon as is practicable thereafter.
Lazard is acting as independent financial advisor to CreXus and Goodwin Proctor LLP is acting as independent legal advisor to a special committee it has working on the deal. Bank of American Merrill Lynch is acting as financial advisor and K&L Gates LLP is acting as legal advisor to Annaly.
Annaly currently owns about 12.4% of CreXus’s outstanding stock.