Independence Realty Trust (IRT +3.1%) shareholders approve the issuance of shares toward the company's acquisition of Trade Street Residential (TSRE +1.5%), and in a separate vote, TSRE owners approve the company's sale.
The deal is expected to close on Thursday, and TSRE shareholders will receive $3.80 in cash and 0.4108 shares of IRT for each share of TSRE they own.
TSRE will be delisted after the close on Thursday.
Independence Realty Trust (NYSEMKT:IRT) speeds its scale-up with an agreement to purchase Trade Street Residential (NASDAQ:TSRE) for cash and stock. The deal will boost the number of properties owned by IRT to 50 from 31, with the number of units increasing 55% to 14,044.
IRT's average property age will dip to 20 years from 25, and average base rents, occupancy levels, and operating margins will all rise.
The deal is expected to be accretive to 2016 core FFO and AFFO per share.
The TSRE chairman and CEO will each join IRT's board, expanding the size to 7 from 5.
Consideration: $3.80 in cash and 0.4108 shares of IRT for each share of TSRE. At IRT's $8.57 close on Friday, it values TSRE at just $6.21 per share vs. its most recent close of $7.08. At IRT's "reference price" of $9.25 - a 1% premium to 45-day average - it values TSRE at $7.60 each. IRT has the option to increase the cash portion of the consideration to $4.56 per share, with a corresponding cut in the stock portion.
IRT's property manager is RAIT Financial (NYSE:RAS) - also an owner of 23% of IRT - and it supports the deal