I had come to think of Realty Income (O) as the ultimate REIT, a Blue Chip REIT if ever there was one. I've now received voting materials for their "Realty Income Issuance Proposal." They want to issue shares in order to fund a merger with VEREIT, which is already a wholly-owned subsidiary of Realty Income. WHAT THE ##$%*!!! In what way does this make any sense? Am I missing something?
They want to issue shares in order to fund a merger with VEREIT, which is already a wholly-owned subsidiary of Realty Income. WHAT THE ##$%*!!! In what way does this make any sense? Am I missing something?Huh? The merger hasn't closed yet, so VEREIT is still it's own stand-alone company, with outstanding stock that's still trading. Here's the presentation that O provided when the agreement was reached: https://s21.q4cdn.com/421822989/files/doc_presentations/2021... On page 3, it says Expected to close Q4 2021 for both Merger and spin-off Since we're only in Q3, that's still a few months away.On page 3, it also says VEREIT’s shareholders to receive 0.705 of a share of Realty Income for each VEREIT common share which means that O has to issue the new stock.AJ
My bad; I read the proposal too hastily. The proposal reads as follows:A proposal to approve the issuance of Realty Income common stock, par value $0.01 per share, in connection with the transactions contemplated by the Agreement and Plan of Merger, dated as of April 29, 2021, as amended, by and among Realty Income, VEREIT, Inc., VEREIT Operating Partnership, L.P., Rams MD Subsidiary I, Inc., a wholly owned subsidiary of Realty Income, and Rams Acquisition Sub II, LLC, a wholly owned subsidiary of Realty Income (which we refer to as the "Realty Income Issuance Proposal"). The phrase "wholly owned" refers to the Rams company, not VAREIT. Now things make more sense...
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