By Vlad Schepkov
Diversified Healthcare Trust (NASDAQ:DHC) announced today it has entered a merger agreement with Office Properties Income Trust (NASDAQ:OPI), according to a joint statement released by the two real estate investment trusts (REITs).
Under the terms of the all-stock deal, DHC shareholders will receive 0.147 shares of OPI for each common share of DHC based on a fixed exchange ratio, for an implied value of $1.70 per DHC share, representing a 20% premium to the average closing price of DHC in the last 30 trading sessions. Upon completion of the merger, DHC shareholders will own approximately 42% of the combined company, while OPI shareholders will own the remaining 58%
The merger, still subject to the approval of DHC and OPI shareholders and other customary closing conditions, is expected to be immediately accretive to DHC shareholders on a pro rata basis and is expected to result in general and administrative savings of approximately $2M-$3M annually.
OPI will be the surviving entity in the merger and intends to change its name to "Diversified Properties Trust" upon closing of the transaction, currently projected for Q3 2023.
"The merger with OPI greatly benefits DHC both strategically and financially" - commented Jennifer Francis, DHC's President and CEO.
Shares of OPI are trading over 20% lower following the announcement, while DHC is up nearly 4%.