Ventas Acquiring Nationwide in $7.4 Billion Merger

The Chicago-based investment trust Ventas Inc. has come to an agreement to buy Newport Beach-based Nationwide Health Properties Inc. in a stock-swap merger worth roughly $7.4 billion. This would make the largest health-care Real Estate Investment Trust (REIT) by equity valuation according to the Wall Street Journal’s Market Watch. The deal will double Ventas’ portfolio to more than 1,300 properties affiliated with health care real estate.

Shares of Nationwide Health Properties (NHP) posted gains of 9 percent rising to $42.45, and Ventas Inc. (VTR) posted loses of almost 4 percent to $55.04 at close this past Friday. According to current market prices, NHP is currently at $42.99 and VTR is currently at $55.66. The deal struck by the companies would essentially give Nationwide stockholders $44.99 per share, which would be a 15 percent premium.

The boards from both companies have unanimously approved the terms, and in sum, the Ventas shareholders would own a 65 percent stake in the merger while Nationwide would hold a 35 percent stake. The portfolio of Ventas Inc. will expand across the country and in Canada to more than 1,300 properties ranging from medical office buildings, skilled nursing facilities, specialty hospitals, and continuing care treatment communities. Ventas acquired Atria Senior Living Group in a $1.5 billion merger last October, setting in motion its endeavor to become the biggest REIT in the country.

Both REIT companies focus on the niche market of health care, with a secondary specialty in senior housing. The merger will result in the companies holding 100 regional operators and other publicly held tenants such as Brookdale Senior Living (BKD), Kindred Healthcare Inc. (KND), and Sunrise Assisted Living Inc. (SRZ). All of the affiliated acquisitions have posted gains since the news has been announced.

Sources:

http://www.latimes.com/health/la-fi-ventas-nationwide-20110228,0,4344957.story

http://www.marketwatch.com/story/ventas-acquires-nationwide-health-2011-02-28?reflink=MW_news_stmp

http://amlawdaily.typepad.com/amlawdaily/2011/02/skadden-wachtell-ventas-nhp.html