* Annaly to pay $12.50 per share, premium of 13 pct
* CreXus shares up 12 pct in morning trade
Nov 12 Mortgage-backed REIT Annaly Capital
Management Inc will spend about $840 million to buy the
shares of CreXus Investment Corp that it does not
Annaly, the largest mortgage REIT listed on the New York
Stock Exchange, will pay $12.50 per share, a premium of 13
percent to CreXus's Friday closing price.
Annaly already owns about 12 percent of CreXus, which is
valued at $958 million based on the offer price.
Shares of Crexus, which acquires, manages and finances
commercial mortgage loans, were up 12 percent at $12.42 in early
trading on the New York Stock Exchange.
CreXus, which is also structured as a real estate investment
trust (REIT), is managed by Annaly's wholly owned subsidiary,
Fixed Income Discount Advisory Co (FIDAC).
The U.S. mortgage market has been showing signs of recovery
since September when the Federal Reserve announced a third round
of quantitative easing to aid the economy, driving down home
loan rates and making it more attractive for borrowers to
The Fed announced open-ended purchases of $40 billion of
mortgage-backed bonds a month until it saw a substantial
improvement in the outlook for the U.S. labor market. The news
spurred refinancing activity to a four-year high.
Two of FIDAC's employee are on the CreXus board. Annaly said
it expected CreXus to form a special committee of independent
directors to consider its proposal.
A REIT is a real estate-linked company that can avoid paying
U.S. corporate income taxes if it distributes at least 90
percent of its taxable income to shareholders.
BofA Merrill Lynch was the financial adviser to Annaly.
Annaly's shares were up almost 1 percent at $15.10.