VER - Why VEREIT Stock Rocketed 19% at the Open Today
Shares of real estate investment trust (REIT) VEREIT (NYSE: VER) rose a dramatic 19% as trading got under way on April 29. The big news driving the advance is that net lease peer Realty Income (NYSE: O) is buying it out in an all-stock deal. Interestingly, however, Realty Income's shares rose, too, gaining about 3%. Normally the shares of the buyer tend to decline. It looks like Wall Street really likes this deal.
VEREIT is one of the largest net lease REITs, with around 3,800 properties. It has basically just completed a multi-year turnaround effort that started after an accounting scandal. One theory during the turnaround was that VEREIT would be sold, but with such a large portfolio there were few names capable of taking on the task. In fact, the only name that made sense was Realty Income, which owns a complementary portfolio of around 6,600 assets. And now it looks like that's exactly what has happened, with VEREIT shareholders set to get 0.705 shares of Realty Income for every VEREIT share they own.
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Why VEREIT Stock Rocketed 19% at the Open Today