Annaly Capital Management Inc. (NLY:US), the largest real estate investment trust that buys mortgage debt, agreed to purchase the rest of Crexus Investment Corp. (CXS:US) for about $872 million to expand its commercial-property business.
Annaly, which already owns 12.4 percent of Crexus, plans to pay $13 a share in cash for the remaining stock, valuing the company at $996 million, according to a statement from the New York-based REIT today. In November, Annaly bid $12.50 a share.
The purchase of Crexus, a commercial-mortgage investor, is part of Annaly’s plan to broaden its business after Federal Reserve purchases of government-backed residential debt reduced yields in its main market. New York-based Crexus, which Annaly started in 2009, has a 45-day period to explore alternatives.
“This transaction represents a significant step toward Annaly’s commitment to investing directly in commercial real estate assets,” Wellington Denahan, the REIT’s chairman and chief executive officer, said in the statement.
The price is 17 percent more than Crexus’s share (CXS:US) value on Nov. 9, the day before the first offer.
The terms of the agreement allow Crexus to receive and negotiate alternatives to the deal though March 16, the company said in a separate statement. A special committee and independent advisers will “actively solicit” proposals, Crexus said.
“There can be no assurance that this process will result in receipt of a superior offer,” Crexus said.
Annaly in recent years has expanded from investing in government-backed mortgage bonds to overseeing distressed-debt buyers and a securities firm. It also started financing middle- market companies and home lenders, and entered ventures to make new commercial real estate loans, after the worst financial crisis since the Great Depression curbed sources of lending.
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