Ventas to acquire Cogdell Spencer
Saurabh is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Ventas Inc (NYSE: VTR) is planning to acquire Cogdell Spencer Inc. (NYSE: CSA) in a deal that is valued at approximately $217 million. Ventas Inc made news when it purchased Nationwide Health Properties Inc. for $5.8 billion in early February. VTR is a REIT (Real Estate Investment Trust) that engages in investment and management of Real Estate used in the Healthcare Industry in the US and Canada. Cogdell Spencer Inc is a REIT that invests in Healthcare facilities. Cogdell is based out of Charlotte, NC.
The shareholders of Cogdell will receive $4.25 a share, an approximately 8% premium to Friday's closing share price. Preferred stock holders will receive $25 a share. Including debt, Ventas valued the acquisition at $760 million to $770 million.
The shares of Cogdell Spencer rose 16.57% in the last 5 days. This momentum in the price was mainly fueled by the news of this acquisition. Meanwhile, the shares of Ventas Inc rose by 3.91% in the last 5 days. In a remarkable development, the director of Ventas Inc, Douglas Pasquale, sold 58,750 shares for $3.2 million. Pasquale filed a SEC form 4 on Wednesday, which can be found here: #mce_temp_url# .
Cogdell Spencer's shares are down 27.49% in the last one year. Cogdell Spencer Inc has been losing money for quite some time now. VTR, on the other hand, is a strong company that has maintained profit margins upwards of 20%. This acquisition might be a contra bet on the prospects of the real estate market in the United States.
There has been news that there have been few lawsuits that have been filed against Cogdell Spencer. These lawsuits might have a significant impact on the success of this potential acquisition.
I do not own stocks in any of the companies discussed in this article.