* Annaly offers $13/shr for remaining stake in CreXus
* Annaly already owns 12.4 pct of CreXus
* CreXus shares rise more than 6 pct; Annaly flat
Jan 31 Annaly Capital Management Inc
will gain control of CreXus Investment Corp after
raising its offer for the remaining 88 percent stake in the
commercial mortgage investor.
Shares of CreXus, which invests mainly in commercial
mortgage loans and commercial mortgage-backed securities, rose 6
percent in early trade on Thursday.
Annaly raised its offer by 50 cents to $13 per share, or
$872 million, as it looks to add a line of business that will
help cushion any blows from the U.S. Federal Reserve's latest
round of bond buying.
"This transaction represents a significant step toward
Annaly's commitment to investing directly in commercial real
estate assets," Annaly's Chief Executive Wellington Denahan said
in a statement.
Annaly, known for its big dividends, typically borrows short
term at low rates and buys mortgage-backed securities (MBS)
guaranteed by agencies such as Fannie Mae and Freddie Mac.
However, the company's interest income took a big hit after
the Fed in September began to mop up $40 billion of agency
mortgage-backed securities every month under the third round of
its quantitative easing program.
The Fed's bond buying flattened the yield curve, compressing
the company's interest rate spreads by a whopping 52 basis point
to 1.02 percent in the third quarter from the second quarter.
The deal, which has been approved by the CreXus board,
values the company at about $996 million.
Annaly, the largest mortgage REIT listed on the New York
Stock Exchange, had in November offered $12.50 for each CreXus
share, then a 13 percent premium.
Annaly said the deal would immediately add to both its
earnings per share and dividends.
Lazard advised CreXus, while Bank of America Merrill Lynch
Annaly shares were flat at $14.98 on the New York Stock