NorthStar Realty is to acquire all of the outstanding shares of Griffin-American Healthcare REIT II in a stock and cash merger valued at USD4 billion, or USD11.50 per share.
Subject to the terms and conditions of the merger agreement, Griffin-American stockholders will receive: (i) USD7.75 per share in cash; and (ii) USD3.75 per share in NorthStar Realty common stock.
The stock portion will be subject to a collar such that Griffin-American shareholders will receive 0.1859 NorthStar Realty shares if NorthStar Realty's stock price is above USD20.17 per share at closing and 0.2344 NorthStar Realty shares if NorthStar Realty's stock price is below USD16.00 at closing.
If NorthStar Realty's stock price at closing is between USD16.00 and USD20.17 per share, Griffin shareholders will receive a number of NorthStar Realty shares between 0.1859 and 0.2344, equal to USD3.75 in value.
"When we launched Griffin-American Healthcare REIT II nearly five years ago, we set out to build a premium portfolio of diversified healthcare real estate in order to provide investors with an opportunity to realise a compelling return on their investment," says Jeff Hanson, chairman and CEO of Griffin-American. "With this transaction, we have executed on our strategy, validating our investment thesis and delivering a strong result for stockholders."