Ventas merger agreement to result in Cogdell preferreds redemption

By Jennifer Chiou

New York, Dec. 28 - Ventas, Inc. entered into an agreement and plan of merger on Dec. 24 with Cogdell Spencer Inc., Cogdell Spencer LP, TH Merger Corp, Inc. and TH Merger Sub, LLC, which would result in the redemption of Cogdell's 8.5% series A cumulative redeemable perpetual preferred stock at $25 apiece plus accrued dividends, according to an 8-K filing with the Securities and Exchange Commission.

Under the agreement, Ventas will acquire Cogdell and its 72 medical office buildings in an all-cash transaction. At closing, including its share of debt, Ventas' investment is expected to be about $760 million to $770 million.

The acquisition of Cogdell is expected to be financed through the assumption of existing Cogdell mortgage debt and other Ventas borrowings.

In addition to the redemption of the preferreds, each Cogdell common share and each Cogdell LP unit will be converted into the right to receive $4.25 in cash, without interest. The consideration represents a premium of 8% to Cogdell's closing price on Dec. 23 and 13% to the average closing price of the shares over the past 30 days.

Also, each share of Cogdell restricted stock and each Cogdell LP long-term incentive plan unit will fully vest and be converted into the right to receive the above merger consideration.

Closing of the transaction is subject to, among other things, approval by the holders of Cogdell common stock and the sale of the assets and companies comprising Cogdell's design-build and development business.

The filing stated that the agreement may be terminated if the merger has not occurred by June 29, 2012, if shareholders do not approve the merger, if Cogdell accepts a superior proposal or if Cogdell's board of directors makes an adverse recommendation change.

There is a $15 million termination fee in addition to a $5 million expense reimbursement.

Ventas is a health care real estate investment trust based in Chicago.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.