Office Properties Income Trust (OPI) said on Tuesday that it has inked a merger deal to buy Diversified Healthcare Trust (DHC) in an all-share transaction.
In pre-market activity on Nasdaq, OPI is trading down by 20.43 percent at $9.19 per share, whereas DHC is trading up by 16.13 percent at $1.44 per share.
According to the deal, each DHC shareholders will receive 0.147 shares of OPI. OPI shareholders will own around 58 percent of the combined company, whereas DHC shareholders will own approximately 42 percent.
The transaction is anticipated to be closed during the third quarter and is expected to be accretive to OPI's normalized funds from operations and cash available for distribution beginning in the second half of 2024.
Upon the deal closure, OPI expects to change its name as "Diversified Properties Trust" and to continue to trade on The Nasdaq Stock Market LLC.
The new company will be led by the OPI team and managed by The RMR Group and will be headquartered in Newton, MA.
Christopher Bilotto, OPI's President and COO, said: "The merger establishes the combined company as a larger, more diversified REIT, better positioned for long-term growth and value creation for OPI shareholders. DHC has an attractive portfolio of healthcare real estate assets, including a portfolio of medical office and life science properties."
OPI has secured a commitment from JPMorgan Chase Bank, NA for a $368 million bridge loan facility to help finance closing of the deal.
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