Ventas buying ARC Healthcare Trust in $2.6B deal


The boards of both companies have unanimously approved Ventas' (VTR) agreement to purchase ARC Healthcare (HCT) in a cash and stock deal valuing HCT at $11.33 each.

ARC Healthcare shares will be converted into a 0.1688 shares of Ventas common at the negotiated price of $67.13 each. HCT owners also have the option of accepting $11.33 in cash for their stock.

In a separate deal, Ventas is buying 29 independent living seniors housing communities in Canada from Holiday Retirement for C$980M.

The deals are expected to be immediately accretive to 2015 normalized FFO per share by at least a dime.

HCT +11.7% to $11.11 per share

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Comments (4)
  • jlalbalos
    , contributor
    Comments (173) | Send Message
     
    At first glance, VTR appears to be paying too high a premium for HTC - Good deal for HTC shareholders.

     

    Long: VTR
    2 Jun 2014, 10:15 AM Reply Like
  • jrs03n
    , contributor
    Comments (70) | Send Message
     
    "HCT owners also have the option of accepting $11.33 in cash for their stock."

     

    Is this an accurate statement?
    2 Jun 2014, 03:42 PM Reply Like
  • jlalbalos
    , contributor
    Comments (173) | Send Message
     
    That's what it says so I'd assume so. The whole offer just seems a bit over the top though.
    2 Jun 2014, 11:56 PM Reply Like
  • atflor
    , contributor
    Comments (4) | Send Message
     
    It is not an accurate statement and the authors writing about this deal need to get their facts straight. The cash portion is capped at 10%, meaning the remaining 90% of HCT shares an investor holds will be converted to VTR shares at .1688/share. At today's closing price that equates to $10.63/share for HCT shareholders. That represents only a 6.3% premium to the original issue price of $10/share. Additionally, converted HCT shares will see their dividend yields go from 6.8% at original issue price down to 4.6% when converted to VTR. It should be no surprise that shareholders of HCT feel this deal undervalues their shares.
    18 Jun 2014, 08:39 PM Reply Like
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