Monogram Residential Trust (MORE 9.80) invests in, develops and operates high quality multifamily communities offering location and lifestyle amenities. The company, which is a real estate investment trust, went public in 2014, opening at $9.00 per share. Today it has announced a definitive merger agreement to be acquired for approximately $3.0 billion, or $12.00 per share in cash, including debt to be assumed or refinanced.
The entity making the acquisition is a newly formed perpetual life fund, Greystar Growth and Income Fund, LP, which is led by Greystone Real Estate Partners and its initial founding capital partners, affiliates of APG Asset Management, GIC, and Ivanhoe Cambridge.
Greystar is the largest operator of apartments in the United States and manages over 415,000 units in more than 140 markets globally. It will be using Monogram's assets as the seed portfolio for the Greystar Growth and Income Fund.
The transaction, which represents a 22% premium over Monogram's unaffected closing stock price on July 3, 2017, is expected to close in the second half of 2017. The deal is not contingent on receipt of financing by Greystar either. JPMorgan Chase has provided a commitment letter to Greystar Growth and Income Fund for $2.0 billion in debt financing for the transaction.
The aggregate transaction value also includes Monogram's share of its two institutional co-investment joint ventures PGGM and NPS, the former of which will be restructured while the latter will be bought by Greystar pursuant to a separate assignable purchase and sale agreement for approximately $0.5 billion.
Monogram said it will pay its previously announced second quarter dividend on July 7, but that it will not pay any other dividends through the close of the transaction except as required to maintain its REIT status. Any other dividends that get paid will be deducted from the purchase price.
Monogram is going to release its second quarter results in early August, but in light of today's announcement it does not expect to host a conference call or webcast to discuss those results.
Entering today's session, shares of MORE were down 9.4% year-to-date. This deal will make up for that lost ground and then some. In turn, it will effectively make any buyers and holders of the stock since the IPO whole, as it represents an all-time high for the stock price.