Realty Income’s Merger With VEREIT

Latham & Watkins LLP represented Realty Income, while Wachtell, Lipton, Rosen & Katz represented VEREIT in the transaction.

Realty Income Corporation (NYSE: O), The Monthly Dividend Company®, and VEREIT, Inc. (NYSE: VER) have entered into a definitive merger agreement by which Realty Income will acquire VEREIT in an all-stock transaction, creating a combined company with an enterprise value of approximately $50 billion. Under the terms of the agreement, VEREIT shareholders will receive 0.705 shares of Realty Income stock for every share of VEREIT stock they own.

Immediately following the closing, the companies expect to effectuate a taxable spin-off of substantially all of the office properties of both companies into a new, self-managed, publicly traded REIT (“SpinCo”). Following the merger and the spin-off, Realty Income will continue as the surviving public entity. Realty Income and former VEREIT shareholders are expected to own approximately 70% and 30%, respectively, of both Realty Income and SpinCo.  

Moelis & Company LLC is serving as lead financial advisor, Wells Fargo Securities is serving as financial advisor to Realty Income. J.P. Morgan Securities LLC is serving as exclusive financial advisor to VEREIT.

Realty Income, The Monthly Dividend Company®, is an S&P 500 company dedicated to providing stockholders with dependable monthly income. The company is structured as a REIT, and its monthly dividends are supported by the cash flow from over 6,500 real estate properties owned under long-term lease agreements with commercial clients.

VEREIT is a full-service real estate operating company which owns and manages one of the largest portfolios of single tenant commercial properties in the U.S. The Company has total real estate investments of $14.6 billion including approximately 3,800 properties and 89.5 million square feet. VEREIT’s business model provides equity capital to creditworthy corporations in return for long-term leases on their properties. 

Latham & Watkins LLP represented Realty Income in the merger and spin-off transaction with a corporate deal team led by Orange County partner William Cernius (Picture) and Orange County and New York partner Charles Ruck, with associates Darren Guttenberg, Christopher Martinez, Madison Mapes, Mekbeb Hagos, Abby Timmons, Jack Vanderford, Tiana Baghdikian, and Brett Newman. Advice was also provided on real estate matters by Orange County partner David Meckler, with associates Steven Mach, Trevor Yedoni, and Caitlin Nguyen; on tax matters by Los Angeles partner Ana O’Brien and Century City partner Pardis Zomorodi, with counsel William Kessler and associate Ryan Brenner; on benefits and compensation matters by Los Angeles partner David Taub, with associates Megan Ampe and Vanessa King; on capital markets matters by New York partner Andrew Baker; on finance matters by Los Angeles partner Kenneth Askin; on environmental matters by Orange County partner Christopher Norton; on intellectual property matters by Orange County counsel David Kuiper; and on litigation matters by San Diego partner Drew Gardiner, and Orange County partner Andrew Gray.

Wachtell, Lipton, Rosen & Katz represented VEREIT with a team led by Adam O. Emmerich and Karessa L. Cain.

Involved fees earner: Megan Ampe – Latham & Watkins; Kenneth Askin – Latham & Watkins; Tiana Talar Baghdikian – Latham & Watkins; Andrew Baker – Latham & Watkins; Ryan Brenner – Latham & Watkins; William Cernius – Latham & Watkins; Drew Gardiner – Latham & Watkins; Andrew Gray – Latham & Watkins; Darren Guttenberg – Latham & Watkins; Mekbeb Negash Hagos – Latham & Watkins; William Kessler – Latham & Watkins; Vanessa King – Latham & Watkins; David Kuiper – Latham & Watkins; Steven Mach – Latham & Watkins; Madison Mapes – Latham & Watkins; Christopher Martinez – Latham & Watkins; David Meckler – Latham & Watkins; Brett Newman – Latham & Watkins; Caitlin Nguyen – Latham & Watkins; Christopher Norton – Latham & Watkins; Ana O’Brien – Latham & Watkins; Charles Ruck – Latham & Watkins; David Taub – Latham & Watkins; Abby Timmons – Latham & Watkins; Jack Vanderford – Latham & Watkins; Trevor Yedoni – Latham & Watkins; Pardis Zomorodi – Latham & Watkins; Karessa Cain – Wachtell, Lipton, Rosen & Katz; Adam Emmerich – Wachtell, Lipton, Rosen & Katz;

Law Firms: Latham & Watkins; Wachtell, Lipton, Rosen & Katz;

Clients: Realty Income Corporation; VEREIT;

Martina Bellini

Author: Martina Bellini