Why MedEquities Realty Trust Is Skyrocketing

Shares jump in response to a buyout offer.

By Brian Feroldi – Updated Apr 9, 2019 at 11:52PM EST

Check out the latest MedEquities Realty Trust and Omega Healthcare earnings call transcripts.

What happened

Shares of MedEquities Realty Trust (NYSE: MRT), a real estate investment trust focused on healthcare properties, jumped 45% as of 11:55 a.m. EST on Wednesday after the company announced that it has accepted a buyout offer from Omega Healthcare Investors (OHI +0.51%).

So what

Here are the key details of the agreement:

The transaction values MedEquities at $600 million, or $10.26 per share.
The deal will be paid for with cash and stock. MedEquities' shareholders will receive 0.235 shares of Omega common stock plus $2 in cash for each share they own.
The transaction is expected to close in the first half of 2019. There are no financing contingencies, and the deal doesn't require the approval of Omega's shareholders.

MedEquities CEO John McRoberts commented: "This is a very compelling transaction for MedEquities' stockholders. We believe going forward that our stockholders will be in an excellent position from having an investment in Omega's diversified portfolio."

Person painting a big fish swallowing a small fish.

Image source: Getty Images.

Omega's CEO Taylor Pickett also expressed his enthusiasm for the deal:

"John and his team have built a high quality diversified portfolio, which should provide Omega with meaningful future growth opportunities. This acquisition reinforces our commitment to the skilled nursing and senior housing industry, while adding new asset types to our portfolio furthering our strategic objectives."

Now what

This looks like a done deal since the transaction is not subject to approval by Omega's stockholders and doesn't involve any financing contingency. Since the transaction is being financed with stock, MedEquities investors will have to decide for themselves whether they want to sell today and book the gain, or become Omega shareholders.

Either way, MedEquities shareholders are off to an excellent start to 2019.

Brian Feroldi first starting "investing" -- if you can call trading penny stocks investing -- in 2004. Thankfully, he lost a good chunk of his money early on and realized there was far more to the stock markets than just buying and selling junk. Realizing that he needed help, Brian voraciously read every book on money and investing that he could get his hands on. Thankfully, that included "the Motley Fool's Investing Guide" and he has been investing using Foolish principles ever since. Brian's investing strategy has morphed into a simple three-step process: 1) Find the highest quality companies on the public markets 2) Buy those companies 3) Sit back and let compounding work its magic Brian was lucky enough to be hired at a start-up medical device maker right out of college. However, after sticking with the company for more than a decade he realized that he was spending all of his free time on his true passion -- finding great stocks to buy. Brian struck gold in 2015 when he was hired by Motley Fool to cover the healthcare industry for Fool.com. He has been doing that ever since. Brian currently resides in Rhode Island where he is happily married and is working hard to raise three small kids. Brian's hobbies are playing board games (chess & escape rooms are his favorite), watching his kids play sports, meeting up with friends, finding ways to lower his carbon footprint, and cheering on the Patriots.

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Why MedEquities Realty Trust Is Skyrocketing

What happened

So what

Now what

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