MVP REIT and MVP REIT II Propose Merger
May 3, 2017 | by James Sprow | Blue Vault
MVP REIT, Inc. (“MVP I”) and MVP REIT II, Inc. (“MVP II”) on May 1, jointly announced that, after reviewing strategic alternatives, a special committee of the board of directors of MVP I has accepted a non-binding Letter of Intent from MVP II regarding a proposed merger of MVP I with MVP II. If necessary approvals are received and other conditions are satisfied, the merger consideration payable by MVP II to each holder of common stock of MVP I would be 0.365 shares of common stock of MVP II. (MVP II closed its public offering on December 31, 2016, during which its shares were sold for $25.00 per share. The most recent net asset value (NAV) per share for MVP I shares was $9.14.)
The Letter of Intent also provides, among other non-binding terms and conditions, that any definitive merger agreement agreed to by the parties will include go-shop and termination fee provisions. The proposed merger is subject to substantial conditions to consummation, including the entry by MVP I and MVP II into a definitive merger agreement, certain third party approvals and, if a definitive merger agreement is reached, any required stockholder approvals.
In connection with the proposed merger, MVP I also announced that it would suspend its distribution reinvestment plan and share repurchase plan pending the consummation of the proposed merger. In accordance with the distribution reinvestment plan and share repurchase plan, the suspension of the distribution reinvestment plan and share repurchase plan will take effect on May 11, 2017 and June 1, 2017.
MVP I also announced, in connection with the proposed merger, that the monthly distribution for record holders as of May 24, 2017 expected to be paid on June 10, 2017 will consist of a $0.0225 cash distribution per share (3% per annum based upon the initial $9.00 offering price), a stock dividend equal to .002414 shares of stock for each share owned (3% per annum based upon the initial $9.00 offering price), and a special one-time distribution of $0.0105 in additional cash distributions per share (0.7% per annum for the remaining two months left in the quarter based upon the initial $9.00 offering price). Thereafter, MVP I anticipates paying monthly cash distributions of $0.0225 per share and stock dividends of .0024 shares for each share of stock owned.
The MVP I Special Committee, consisting entirely of independent directors, was advised by Robert A. Stranger & Co., Inc. and Venable LLP as financial and legal advisers, respectively. The proposed merger terms were negotiated on behalf of MVP II by a special committee of its board of directors, consisting entirely of independent directors and advised by Houlihan Lokey Capital, Inc. and Vinson & Elkins L.L.P., as financial and legal advisers, respectively.
MVP REIT, Inc. is a publicly registered, non-listed hybrid real estate investment trust (“REIT”), which completed its initial public offering in September 2015. MVP REIT, Inc. primarily invests in parking facilities throughout the United States, secured by long term leases with national and regional operators.
MVP REIT II, Inc. is a publicly registered, non-listed REIT formed to invest primarily in parking lots and facilities in the United States and Canada.
Both MVP I and MVP II are managed by MVP Realty Advisors, LLC.
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