Campus Crest Soars on Merger Agreement

Banking, finance, and taxes

Published: October 19, 2015 3:04 pm

Last Updated: April 27, 2020 6:19 pm

Campus Crest Communities, Inc. (NYSE: CCG) is leading the bulls on Monday afternoon on news of an acquisition. The REIT announced that it has entered into a definitive merger agreement with affiliates of Harrison Street Real Estate Capital.

The total estimated merger consideration is $7.03 per share, the overall transaction value is $1.9 billion. The merger agreement was unanimously approved by Campus Crest’s board of directors but it is still subject to customary closing conditions.

Under the terms of the merger agreement, the final merger consideration will be determined following the closing of the Montreal sale, currently expected to occur before October 30.

The total estimated consideration represents a 24% premium over the most recent closing price on Friday, and a 35% premium over the company’s 60-day volume weighted average price.

Richard Kahlbaugh, Non-Executive Chairman of Campus Crest, said:

Beginning in October of 2014, our Board initiated an undertaking to simplify the business model, change executive management and maximize shareholder value through a comprehensive strategic review process. We are pleased to announce that after thoroughly analyzing numerous proposals, including a number of qualified potential buyers and a range of alternative transactions, the Board unanimously determined that this transaction is the best course of action in achieving our goal to maximize shareholder value. We are pleased that Harrison Street recognizes the value inherent in our portfolio of high-quality student housing properties.

Christopher Merrill, co-founder, President and CEO of Harrison Street, added:

As a significant owner of student housing assets, we are pleased to add these attractive properties to our portfolio. The need for high-quality off-campus housing continues to grow and we believe this sector has strong long-term fundamentals that will drive sustainable returns.

Shares of Campus Crest were up nearly 17% at $6.64, with a consensus analyst price target of $6.75 and a 52-week trading range of $4.68 to $8.05.

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