Two medical office real estate companies are reportedly in the final stages of merger discussions that would yield a new entity valued at over $10 billion.
Per the Wall Street Journal, Healthcare Trust of America and rival Healthcare Realty Trust could finalize a cash-and-stock deal by early next week.
However, anonymous sources speaking to the journal said that the deal could still fall through the cracks.
The larger of the two companies, Healthcare Trust is valued at about $6.7 billion. The Scottsdale, Arizona-based organization was founded in 2006, listed on the New York Stock Exchange in 2012 and controls roughly 25.3 million square feet of gross leasable area, according to its website.
However, the company has been under pressure from activist investor Elliott Management to explore a sale since late last year.
RELATED: Kaufman Hall picks up healthcare real estate company
In an October letter sent to Healthcare Trust’s board, Elliott cited the real estate company’s long-term underperformance and other financial shortcomings as evidence that a premium valuation sale would be preferable to stand-alone growth.
The group also wrote that its thesis was supported by other investors, leading the company to announce in November that it was exploring options including potential sales, joint ventures and partnerships.
Founded in 1992, Healthcare Realty controls 17.9 million square feet across 258 properties and a market capitalization of about $4.6 billion.
In earnings announced earlier this week, the Nashville company reported $520.3 million in 2021 revenue, up from 2020’s $492.3 million. After expenses and other modifiers, Healthcare Realty landed on 2021 annual income of $66.7 million, down from 2020’s $72.2 million.