HTA - Healthcare Trust/Healthcare Realty deal likely to get shareholder approval - analyst

Healthcare Realty's ( NYSE: HR ) planned purchase of Healthcare Trust of America ( NYSE: HTA ) is likely to win shareholder approval at votes on Friday, according to Jefferies.

With prominent proxy advisers ISS and Glass Lewis on board, as well as a joint venture and asset sales on track to fund the cash portion of the transaction, the vote will likely pass and the deal will close on July 20, Jefferies analyst Jonathan Petersen wrote in a note on Sunday.

The vote as well as the ISS and Glass Lewis recommendations come as some investors have been disappointed by the deal since it was announced in February and some investors including activist Jonathan Litt reportedly plan to vote against it.

Last month Litt argued that Healthcare Realty ( HR ) would be better served by taking a ~$5 billion buyout from Welltower ( NYSE: WELL ).

"A shareholder that votes `against' the merger is likely hoping that WELL's bid is still on the table, which we wouldn't count on as subsequent market volatility likely changes WELL's willingness to pay $31.75/sh, and HR's proven ability to sell assets at lower cap rates," Petersen, who has buy ratings on HR and HTA, wrote in the note.

Petersen added that proceeds from HR's talks to sell $600 million of properties will likely be used to repurchase shares are likely a "key catalyst" to move the stock higher follow the deal close.

Healthcare Realty ( HR ) and Healthcare Trust of America ( HTA ) in February agreed to a $18B deal that brings together two of the largest owners of medical office buildings.

HTA announced in November that it was exploring options, including a potential sale , after activist Elliott Management had been pressuring the company to sell itself.

For further details see: