Real estate mortgage investment funds Street Partners Realty Trust Handbook (BSPRT) and Capstead Mortgage Corporation REIT announced on Monday that it plans to merge into a new company.
A newly merged firm called Franklin BSP Realty Trust – plans to start trading on New York Stock Exchange under the ticker FBRT and will become the fourth largest commercial mortgage REIT, it said.
The deal will combine the primarily commercial mortgage company BSPRT and REIT Capstead to create a combined company with approximately $ 2 billion in equity.
“With the combined capital of BSPRT and Capstead, we are well positioned to seize the opportunities ahead and create greater value for our shareholders,” Richard Byrne, Says in the message of the CEO of BSPRT. “We believe that our differentiated investment strategy focused on medium-sized commercial mortgages gives us a significant competitive advantage with a large-scale and diversified portfolio that has generated significant growth and attractive long-term profitability.”
As part of the deal Benefits of street partners – which operates BSPRT – will pay Capstead shareholders about $ 75 million in cash, with the remainder funded by BSPRT, which will also issue shares in the new REIT to Capstead shareholders.
The cash payment will provide a 15.75 percent premium to Capstead’s post-closing adjusted book value per share. According to the announcement, as of June 30, it will be $ 0.99 per share.
The merger was unanimously approved by the Boards of Directors of BSPRT and Capstead, and is still pending approval by Capstead shareholders.
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