What happened
Shares of American Campus Communities (ACC) rose sharply at the open on April 19, gaining as much as 13% in early trading. Precipitating the move was an announcement by the campus housing real estate investment trust (REIT) that it had agreed to be taken over.
So what
Before the market opened today, American Campus issued a press release explaining that entities controlled by Blackstone (BX 3.12%), including Blackstone Real Estate Income Trust and Blackstone Property Partners, have agreed to buy the REIT. It is an all-cash deal that will see American Campus shareholders receive $65.47 for each share they own. The total value of the deal is roughly $12.8 billion.
Image source: Getty Images.
The price being offered represents a 30% premium to American Campus' price on Feb. 16, the day prior to news that it had received an indication of takeover interest. The price is roughly 14% higher than the close on April 18. The deal has been approved by the board, but still has to be given the green light by shareholders. Assuming the process goes smoothly, American Campus expects the deal to close in the third quarter.
Now what
One interesting stipulation of the deal is that American Campus is immediately suspending its dividend. So the only reason to stick around is to get the very slight discount that's currently priced in here, with the stock trading in the $64.90-per-share area. Such discounts are normal, since there's always a risk that a deal will go sideways. But for investors who have stocks on their wish lists, it might make more sense to lock in gains now and put the freed-up cash to better use elsewhere.
