(By Balaseshan) Health Care REIT Inc. (NYSE:HCN) said it has agreed to buy Sunrise Senior Living Inc. (NYSE:SRZ) for $14.50 per share in cash, a 62.4% premium to Sunrise's previous closing price.
Following the news, shares of SRZ jumped 58.12% in the premarket.
The transaction positions Health Care REIT among the largest owners of seniors housing in the world with over 58,000 units located in the U.S., Canada, and the United Kingdom.
As part of the transaction, Health Care REIT will acquire Sunrise's 20 wholly owned seniors housing communities and Sunrise's interest in joint ventures that own 105 seniors housing communities.
The 20 wholly owned communities are located in the U.S. (17) and Canada (3), while the joint venture communities are located in the U.S. (78) and the United Kingdom (27).
The purchase price reflects a real estate value of about $1.9 billion, of which about $950 million will be paid in cash and the balance through the assumption of debt at an average interest rate of about 4.9%.
The transaction is not subject to any financing contingency and was unanimously approved by the Sunrise board of directors.
The transaction, which is subject to regulatory approvals, customary closing conditions and approval by Sunrise's shareholders, is expected to close in the first half of 2013.
If the transaction does not close on or prior to February 21, 2013, as a result of certain closing extension rights which may be exercised by Health Care REIT, Sunrise shareholders will be entitled to receive additional transaction consideration during the period beginning on February 21, 2013.
HCN closed Tuesday's regular session down 0.22% at $59.75, while SRZ ended up 0.11% at $8.93.