Realty Income and Spirit Realty Capital set for $9.3 billion merger in Q1 2024

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Realty Income and Spirit Realty Capital set for $9.3 billion merger in Q1 2024
Credit: © Reuters.

Realty Income Corporation (NYSE: O ) is set to merge with Spirit Realty Capital, Inc. (NYSE:NYSE: SRC ) in a deal valued at approximately $9.3 billion. The all-stock transaction, announced today, will see Spirit Realty's shareholders receive 0.762 Realty Income common shares for each Spirit share they hold. Post-merger, the ownership split will be approximately 87% for Realty Income and 13% for Spirit.

The merger, which is expected to close in Q1 2024, is conditional on approvals from both companies' boards of directors, Spirit’s stockholders, and NYSE listing for Realty Income Common Stock shares. Moreover, the registration statement on Form S-4 must also be effective. If canceled under certain conditions, termination fees of $173.97 million or $93.68 million would apply. However, an Alternative Superior Proposal could lower these fees.

In addition, Spirit Series A Preferred Stock and Restricted Stock Award will be automatically converted into corresponding Realty Income stocks. The deal has received financial advice from Wells Fargo (NYSE: WFC ), J.P. Morgan Securities LLC, and Morgan Stanley & Co (NYSE: MS ). LLC, and legal counsel from Latham & Watkins and Wachtell, Lipton, Rosen & Katz for Realty Income and Spirit respectively.

Meanwhile, Rowley Law PLLC is investigating potential securities law infringements by the board of directors of Spirit Realty Capital in relation to the proposed takeover by Realty Income Corporation. The investigation is using data resources from Barchart Market Data Solutions, Morningstar, Zacks Investment Research, and Edgar Online's SEC filings.

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