Single-family rental company giants American Homes 4 Rent and American Residential Properties have agreed to a $1.5B merger.
The deal will see each share of ARP’s common stock exchanged for 1.135 common shares of AH4R, valuing each share of ARP at $19.01—a premium of 19.08% over its most recent average closing price, CoStar reports.
The combined company is expected to own more than 47,000 homes spread across 22 states with an equity market cap of $5.5B and a cost basis of greater than $8B.
The SFR industry is still in its infancy but is beginning to post positive operational numbers as it's starting to go through consolidation. ARP was a recent target of activist investor Jonathan Litt, who holds a 7.4% stake in the company through his company, Land and Buildings Investment Management.
Litt acquired his stake for $24.2M, which is now worth $27.96M as a result of the merger. [CoStar]
