Long Beach REIT Makes Acquisition

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Health Care Property Investors Inc. said Tuesday it plans to buy another health care real estate investment trust in a $3.57 billion cash-and-stock deal that would create the nation’s largest public REIT specializing in health care properties.


Long Beach-based Health Care Property will pay $13.50 for each share of Orlando, Fla.-based CNL Retirement Properties Inc. The company also will assume or refinance about $1.6 billion of CNL’s debt, raising the total value of the transaction to $5.2 billion.


A separate management company, CNL Retirement Corp., also is being purchased by HCP for 4.4 million shares of Health Care Property stock, or around $120 million. Each acquisition is conditioned on the consummation of the other.


Health Care Property shares were down 2.4 percent to $26.20 on Tuesday.


CNL owns about 262 properties in 33 states, according to year-end figures. Following the purchase, which the company expects to close in the third quarter, Health Care Property said will own nearly 800 properties in 44 states, the nation’s largest portfolio of independent and assisted living communities, health-care facilities and medical office buildings.


“This transaction takes HCP to the next level and dramatically alters the healthcare real estate industry landscape,” Chief Executive James F. Flaherty III said in a statement.


The boards of both companies have approved the acquisition, which still requires approval by CNL shareholders. At the time of the closing, CNL shareholders would receive for each of their shares $11.13 cash and 0.0865 of a share of Health Care Property common stock.


Cohen & Steers Capital Advisors, LLC and UBS acted as financial advisers to Health Care Property and Sullivan & Cromwell, LLP were its legal counsel.

Banc of America Securities LLC was financial adviser to CNL and Greenberg Traurig, LLP was its legal counsel. Houlihan Lokey Howard & Zukin was financial adviser and Akin Gump Strauss Hauer & Feld LLP was legal adviser to the special committee.

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