Safehold, IStar Announce Combination

Safehold Inc. (SAFE) and iStar Inc. (STAR) have entered into a definitive agreement for a strategic combination. Safehold will internalize iStar's management team and intellectual property, replacing Safehold's external management structure. Safehold will effectively assume iStar's $100 million in L+150 trust preferred securities due 2035 and Safehold will effectively issue 1.2 million new SAFE shares to iStar.

Prior to the merger, iStar will spin off to iStar shareholders a new publicly traded entity, or SpinCo, that will own all of its remaining non-ground lease assets and $400 million of its SAFE shares. Safehold shareholders are expected to own approximately 34% of new Safehold. iStar shareholders are expected to own approximately 37% of new Safehold directly and 14% indirectly as a result of the spin-off transaction.

iStar has agreed to sell SAFE shares representing 9% of SAFE shares outstanding to MSD Partners, L.P. and, separately, to settle its long-term management incentive plan obligations using its SAFE shares representing 6% of SAFE shares outstanding.

Prior to the closing of the transaction, iStar will undergo a reverse stock split to reduce the number of iStar shares outstanding to be equal to the number of SAFE shares owned by iStar immediately prior to the merger. The shares of SAFE owned by iStar will be retired and each share of SAFE not owned by iStar will be exchanged for one share of common stock of new Safehold. Each share of STAR would receive a combined implied value of approximately $18.39, comprised of interests in SpinCo with a book value of $6.48 per share and an estimated 0.27 shares of SAFE.

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