Annaly Capital Management Inc. (NLY) offered to buy the shares of Crexus Investment Corp. (CXS) it doesn’t already own for about $839 million, representing a 13 percent premium over the mortgage-finance firm’s last closing price.
Annaly, a New York-based real estate investment trust, owns about 12.4 percent of Crexus, it said in a statement. The $12.50-a-share deal would allow Annaly, which invests primarily in government-backed mortgage securities, to expand its commercial-property loan business.
“Given the current market, we believe it is prudent to diversify a portion of our investment portfolio,” Annaly Chief Executive Officer Wellington Denahan said in a separate statement. “A powerful step in that direction is the proposed acquisition of Crexus.”
An Annaly subsidiary, Fixed Income Discount Advisory Co., manages the investment in Crexus, and two FIDAC employees are on Crexus’s board of directors, Annaly said. Crexus probably will create a special committee of independent directors to consider the proposal and negotiate terms, Annaly said.
The deal “could be beneficial to all constituents,” Denahan said in a Nov. 9 letter to the Crexus board that was distributed today.
Annaly has hired Bank of America Corp.’s Merrill Lynch unit as a financial adviser, and K&L Gates LLP as legal counsel to assist with the acquisition.
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