Select Income REIT SIR.N said it would buy office REIT Cole Corporate Income Trust in a $3 billion deal to expand its portfolio in the United States.
Cole Corporate stockholders can opt to receive $10.50 in cash or 0.36 shares of Select Income's common stock, the companies said.
The stock component is valued at $10.04 per share based on Select Income stock's Friday close.
The cash or the stock consideration cannot exceed 60 percent of the total, the companies said.
REIT Cole Corporate Income Trust is managed by Cole Capital, a unit of American Realty Capital Properties Inc ARCP.O.
The deal will give Select Income 64 office and industrial net lease properties and tenants such as Amazon.com (AMZN.O), Tesoro Corp (TSO.N), Noble Energy Inc (NBL.N) and F5 Networks (FFIV.O).
Select Income, managed by Reit Management & Research LLC, will also get 23 healthcare properties from Cole Corporate. The company plans to sell these properties to Senior Housing Properties Trust SNH.N, which is also managed by Reit Management, for about $539 million.
UBS Investment Bank was financial adviser to Select Income while Skadden, Arps, Slate, Meagher & Flom LLP acted as legal counsel.
Wells Fargo Securities LLC and Hentschel & Co financially advised Cole Corporate and Morris, Manning & Martin LLP and Venable LLP provided transaction counsel.
(Reporting by Mridhula Raghavan in Bangalore; Editing by Sriraj Kalluvila)