Spirit Realty Capital Shareholders Approve Realty Income Merger

Rhea-AI Summary

Realty Income Corporation (NYSE: O) and Spirit Realty Capital, Inc. (NYSE: SRC) have announced that Spirit stockholders have approved all necessary proposals for the merger with Realty Income. Approximately 99.8% of the votes cast were in favor of the merger, representing about 86.4% of the outstanding shares of Spirit common stock. The merger is expected to close on January 23, 2024, with Spirit common shareholders receiving 0.762 newly-issued Realty Income common shares for each Spirit common share they own. Additionally, Spirit's outstanding shares of Series A Cumulative Redeemable Preferred Stock will be exchanged for shares of Realty Income Series A Cumulative Redeemable Preferred Stock, trading under the symbol 'O PR' on the NYSE.

Financial Analyst

The approval of the merger between Realty Income Corporation and Spirit Realty Capital by Spirit's stockholders is a significant event with potential implications for both companies' financial performance and stock valuation. The overwhelmingly positive vote suggests a strong consensus among shareholders that the merger is in their best interest.

From a financial perspective, the exchange ratio of 0.762 newly-issued Realty Income shares for each Spirit share indicates a valuation metric that will be scrutinized by analysts. This ratio determines the immediate financial impact on shareholders' equity. Post-merger, the combined entity's financials will reflect the integration of assets and liabilities, likely leading to a re-evaluation of the stock by the market.

Moreover, the exchange of Spirit's outstanding preferred stock for Realty Income preferred stock is a critical aspect of the merger, as it affects the income stream and risk profile of the preferred shareholders. The expected trading of the new preferred shares under the symbol 'O PR' will provide liquidity and market visibility for these securities.

Market Research Analyst

The real estate investment trust (REIT) market is highly competitive and mergers and acquisitions can lead to strategic advantages. The merger between Realty Income and Spirit is likely to create a larger, more diversified REIT with an expanded asset portfolio. The scale of the combined entity could result in operational efficiencies and enhanced bargaining power with tenants and service providers.

For stakeholders, the short-term implications include potential stock price volatility as the market digests the merger details and adjusts to the new equity structure. In the long term, the success of the merger will hinge on the effective integration of the two companies' portfolios and management practices, which could result in increased market share and improved financial stability.

It is essential to monitor how the merger aligns with industry trends, such as the demand for different types of commercial properties and the geographic diversification of assets. The combined entity's ability to adapt to market changes will be crucial for its long-term success.

Legal Expert

The completion of the merger is contingent upon customary closing conditions, which typically include regulatory approvals and the satisfaction of any remaining legal requirements. The absence of a need for Realty Income shareholder approval simplifies the process, reflecting the transaction structure agreed upon by both companies.

The legal framework of the merger, as outlined in the SEC filings, will be of interest to investors who seek to understand the governance implications of the merger. The filings will detail the terms of the exchange of securities and the rights of shareholders post-merger. Legal transparency in these documents is essential to maintain investor confidence and ensure compliance with securities regulations.

The legal intricacies of the merger, such as the treatment of preferred stock and the maintenance of shareholder rights, will be closely watched by stakeholders to ensure that their interests are adequately protected during the transition.

SAN DIEGO and DALLAS, Jan. 19, 2024 /PRNewswire/ -- Realty Income Corporation (NYSE: O) ("Realty Income"), The Monthly Dividend Company^®, and Spirit Realty Capital, Inc. (NYSE: SRC) ("Spirit"), today announced that Spirit stockholders approved all of the proposals necessary for the closing of the previously announced merger pursuant to which Realty Income will acquire Spirit. No approval of Realty Income shareholders is required in connection with the merger.

At the special meeting of Spirit stockholders held today, approximately 99.8% of the votes cast were voted in favor of the merger, which represented approximately 86.4% of the outstanding shares of Spirit common stock.

The final voting results on the proposals voted on at the special meeting will be set forth in Spirit's Form 8-K filed with the U.S. Securities and Exchange Commission ("SEC") after certification by its inspector of election.

The merger is subject to customary closing conditions and is expected to close on January 23, 2024. Under the terms of the merger agreement, at the closing of the merger, Spirit common shareholders will receive 0.762 newly-issued Realty Income common shares for each Spirit common share they own immediately prior to the effective time of the merger. In addition, at the closing of the merger, all of Spirit's outstanding shares of Series A Cumulative Redeemable Preferred Stock will be exchanged for shares of Realty Income Series A Cumulative Redeemable Preferred Stock, which are expected trade under the symbol "O PR" on the New York Stock Exchange.

About Realty Income
Realty Income, The Monthly Dividend Company^®, is an S&P 500 company and member of the S&P 500 Dividend Aristocrats^® index. We invest in people and places to deliver dependable monthly dividends that increase over time. The company is structured as a real estate investment trust ("REIT"), and its monthly dividends are supported by the cash flow from over 13,250 real estate properties primarily owned under long-term lease agreements with commercial clients. To date, the company has declared 643 consecutive common stock monthly dividends throughout its 55-year operating history and increased the dividend 123 times since Realty Income's public listing in 1994 (NYSE: O). Additional information about the company can be obtained from the corporate website at www.realtyincome.com.

About Spirit Realty
Spirit Realty Capital, Inc. (NYSE: SRC) is a premier net-lease REIT that primarily invests in single-tenant, operationally essential real estate assets subject to long-term leases. As of September 30, 2023, Spirit's diverse portfolio consisted of 2,037 retail, industrial and other properties across 49 states, which were leased to 338 tenants operating in 37 industries. As of September 30, 2023, Spirit's properties were approximately 99.6% occupied.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended. When used in this press release, the words "estimated," "anticipated," "expect," "believe," "intend," "continue," "should," "may," "likely," "plans," and similar expressions are intended to identify forward-looking statements. Forward-looking statements include discussions of Realty Income's business and portfolio; strategy, plans, and the intentions of management; and statements regarding the merger including the anticipated closing date. Forward-looking statements are subject to risks, uncertainties, and assumptions about Realty Income which may cause its actual future results to differ materially from expected results. Some of the factors that could cause actual results to differ materially are, among others, its continued qualification as a REIT; general domestic and foreign business, economic, or financial conditions; competition; fluctuating interest and currency rates; inflation and its impact on its clients and us; access to debt and equity capital markets and other sources of funding; continued volatility and uncertainty in the credit markets and broader financial markets; other risks inherent in the real estate business including its clients' defaults under leases, increased client bankruptcies, potential liability relating to environmental matters, illiquidity of real estate investments, and potential damages from natural disasters; impairments in the value of its real estate assets; changes in domestic and foreign income tax laws and rates; its clients' solvency; property ownership through joint ventures and partnerships which may limit control of the underlying investments; current or future epidemics or pandemics, measures taken to limit their spread, the impacts on Realty Income, its business, its clients (including those in the theater and fitness industries), and the economy generally; the loss of key personnel; the outcome of any legal proceedings to which Realty Income is a party or which may occur in the future; acts of terrorism and war; the structure, timing and completion of the merger and any effects of the announcement, pendency or completion of the merger, including the anticipated benefits therefrom; and those additional risks and factors discussed in its reports filed with the SEC. Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements are not guarantees of future plans and performance and speak only as of the date of this press release. Actual plans and operating results may differ materially from what is expressed or forecasted in this press release. Realty Income does not undertake any obligation to update forward-looking statements or publicly release the results of any forward-looking statements that may be made to reflect events or circumstances after the date these statements were made.

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SOURCE Realty Income Corporation

What is the ticker symbol for Realty Income Corporation?

The ticker symbol for Realty Income Corporation is 'O'.

When is the expected closing date for the merger between Realty Income and Spirit Realty Capital?

The merger is expected to close on January 23, 2024.

What will Spirit common shareholders receive at the closing of the merger?

Spirit common shareholders will receive 0.762 newly-issued Realty Income common shares for each Spirit common share they own.

How will Spirit's outstanding shares of Series A Cumulative Redeemable Preferred Stock be exchanged?

At the closing of the merger, all of Spirit's outstanding shares of Series A Cumulative Redeemable Preferred Stock will be exchanged for shares of Realty Income Series A Cumulative Redeemable Preferred Stock, which are expected to trade under the symbol 'O PR' on the NYSE.