Annaly Capital Management extends exchange offer to acquire MTGE

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The expiration of Annaly Capital Management's offer to purchase MTGE Investment Corp. was delayed until Sept. 7 so the two real estate investment trusts have more time to satisfy deal conditions.

"The offer will now expire at 7:00 a.m., Eastern Time, on Sept. 7, 2018, unless further extended in accordance with the terms of the merger agreement," Annaly said in a press release.

The two companies agreed to the $900 million deal in May. Under the terms of the agreement, Annaly will pay for the acquisition of MTGE with a mixture of cash and shares of its common stock. Both REITs invest in a mixture of residential and commercial assets.

MTGE shareholders may elect to receive in exchange for each share of common stock they hold either: a combination of $9.82 in cash and 0.9519 shares of Annaly's common stock, $19.65 in cash, or 1.9037 shares of Annaly common stock.

The shareholders that choose the all-cash and all-stock options are subject to proration such that half the aggregate consideration will be paid in cash, and half will be paid in stock.

Annaly has a history of striking deals to acquire companies during periods when mortgage rates are volatile, CEO Kevin Keyes noted during the company's second-quarter earnings call.

"We bought a $1.5 billion public company in Hatteras in the midst of some hypervolatility, and then this first quarter, when things were getting pretty messy out there, we bought another company," he said.

"When we see the market become more risky, that's when we can be the most opportunistic," Keyes added.

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