CHICAGO AND NEW YORK CITY — It is shaping up to be a blockbuster day for REIT deals. Chicago-based Ventas will become the largest healthcare REIT in the nation with its $7.4 billion acquisition of Nationwide Health Properties (NHP). In addition, reports are surfacing that private equity firm Blackstone is purchasing the American assets of Australian retail REIT Centro Properties Group for $9.4 billion.
Under the terms of its agreement with NHP, Ventas will acquire all of NHP's outstanding shares in a stock-for-stock transaction. NHP shareholders will receive a fixed exchange ratio of 0.7866 Ventas shares for each share of NHP common stock. Based on Friday's closing price, this would give NHP shareholders a 15 percent premium over NHP's closing stock price that day. Upon closing of the deal, which is expected to occur in the third quarter, Ventas shareholders will own approximately 65 percent of the combined company, and NHP shareholders will own the remaining 35 percent.
The deal would make Ventas the largest healthcare REIT in the nation, with a pro forma equity value of approximately $17 billion and a pro forma enterprise value of approximately $23 billion. The company would control 1,300 assets in 47 states and have $1.3 billion in net operating income. Senior housing would account for approximately 55 percent of its holdings, skilled nursing facilities would account for 22 percent and medical office buildings would account for 11 percent.
Ventas Chairman and CEO Debra Cafaro would continue in her role with the combined company. Current NHP Chairman Douglas Pasquale would serve as a senior advisor during the transition period, then joined the combined company's board of directors.
The NHP deal is the latest in a series of large healthcare acquisitions for Ventas. Last summer, the REIT purchased Lillibridge Healthcare Services. A few months later, it acquired the real estate interests of Sunrise Senior Living for $186 million. By the end of the year, it had entered into an agreement to acquired Atria Senior Living for $3.1 billion — a deal that is expected to close in April.
On the other side of the commercial real estate spectrum, Centro Properties Group filed a request with the Australian Stock Exchange to halt trading of its stapled securities pending the announcement of a potential transaction. Shortly after the release of this statement, the Wall Street Journal reported that New York City-based Blackstone had won a bidding war to acquire the company's 588 U.S. shopping centers for $9.4 billion. The report states that Centro's Australian operations would continue as a standalone company. Centro had not commented on the deal as of press time, but keep checking REBusinessOnline.com for updates on this potential mega-deal.
— Coleman Wood