HCP Inc. on Tuesday said it will sell 24 million shares of stock to help fund its $6.1 billion acquisition of HCR ManorCare’s real estate assets, rather than give HCR’s owners some HCP stock as originally planned.
The Long Beach real estate investment trust expects to use net proceeds to provide Carlyle Group, which bought the Toledo, Ohio nursing home and rehabilitation hospital operator in 2007, with $852 million in cash rather than 25.7 million shares of HCP's stock.
The REIT, which has roughly a $13.9 billion market cap and 371 million shares outstanding, has not yet priced the shares. At Tuesday’s closing price, the sale would produce gross proceeds of about $890 million. HCP also plans to give underwriter BofA Merrill Lynch a 30-day option to buy up to an additional 3.6 million shares, which would gross another $133 million.
HCP on Dec. 13 said that it would buy and then lease back all the real estate assets of HCR, which operates about 300 facilities, in a cash-and-stock deal. Later that month, HCP sold 46 million shares in a $1.47 billion secondary offering to help pay for cash portion of the deal. In January it sold about $2.4 billion in senior unsecured notes, also to help fund the acquisition.
Shares closed down 52 cents, or 1.4 percent, to $37.08 on the New York Stock Exchange.
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