Please ensure Javascript is enabled for purposes of website accessibility

Why MedEquities Realty Trust Is Skyrocketing

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

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares jump in response to a buyout offer.

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 1.39%).

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 has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Omega Healthcare Investors, Inc. Stock Quote
Omega Healthcare Investors, Inc.
OHI
$33.56 (1.39%) $0.46

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/14/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.