New York REIT, JBG Cos. Call Off Merger
August 02 2016 - 7:40AM
Dow Jones News
New York REIT Inc. and JBG Cos. said Tuesday the two companies
would call off their merger and New York REIT would move to sell
off its own assets after the deal failed to gain support with
shareholders.
"Investors were clear in their preference for a liquidation to
generate near-term cash," Matt Kelly, JBG managing partner,
said.
The deal between the two real estate trusts was announced in
May. New York REIT shares have fallen about 3% since before the
deal was announced until Tuesday.
The companies said after talking to shareholders it became clear
they didn't support the deal and that any modification of the deal
was unlikely to gain shareholder approval, so it made sense to
terminate the deal rather than proceed with a formal shareholder
vote.
New York REIT will pay JBG $9.5 million to reimburse it for
costs related to the merger.
New York REIT Chairman Randolph Read said the company will begin
a process of selling off its individual assets and returning cash
to shareholders, but that it would also be open to a "compelling
offer for the entire company."
JBG is privately held. Shares of New York REIT, which have
fallen 7.8% in the last three months, were inactive in premarket
trading.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
August 02, 2016 08:25 ET (12:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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