Healthcare Trust of America, Healthcare Realty to combine in medical REIT deal


Adds details and background

Feb 28 (Reuters) - Healthcare Realty Trust Inc HR.N and Healthcare Trust of America Inc HTA.N have agreed to merge, the companies said on Monday, creating the largest medical office landlord in the United States.

The combined real estate investment trust will have 727 properties in its portfolio and a pro-forma total enterprise value of $17.6 billion as of Thursday's close.

Activist investor Elliott Investment Management had urged Healthcare Trust of America in October to explore a potential sale, saying the company's longstanding underperformance compared to its peers has stoked frustration among shareholders.

Healthcare Trust's shareholders will receive a total implied value of $35.08 per share, including a special cash dividend of $4.82 per share and a transaction exchange ratio of 1:1, the companies said.

Healthcare Trust's stock has traded between $20 and $35 since 2016, which resulted in Elliott's letter to the company.

The offer values Healthcare Trust of America at $7.75 billion, based on 220.8 million outstanding shares, according to Reuters calculations.

Healthcare Trust's shares fell nearly 4% in premarket trading on Monday, while those of Healthcare Realty tumbled 8%.

The deal is structured as a reverse merger. Healthcare Trust of America will become the corporate successor, while the company's name will be Healthcare Realty Trust Inc.

After the transaction closes, which is expected in the third quarter, Healthcare Realty shareholders will own 39% stake in the combined entity, while the remaining will be held by Healthcare Trust shareholders.

(Reporting by Leroy Leo in Bengaluru; Editing by Krishna Chandra Eluri and Sriraj Kalluvila)

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