Gramercy Buy-Out Sends AFR Shares Up 23%

JENKINTOWN, PA-Gramercy Capital Corp.’s offer to acquire locally based American Financial Realty Trust represents approximately $1.1 billion in cash and stock plus the assumption of about $2.3 billion in AFR debt. The offer of $5.50 per AFR share in cash plus 0.12096 a share of Gramercy stock values AFR shares at $8.43 each, which represented a 31% premium over trading of AFR shares at the close of the NYSE on Friday, Nov. 2, prior to announcement of the acquisition agreement.

Following the announcement and joint conference call, shares of AFR on the NYSE spiked to $7.95, up slightly more than 23% from the Friday close of $6.45 a share. Shares of GKK took a slight dip in the opposite direction, falling from a Friday close of $24.23 a share to $23.57.

The buy would give Gramercy 27 million sf in 37 states. During the conference call, Marc Holliday, Gramercy’s CEO, said that under its business plan for the acquisition, 147 of the current 1,305 properties in the AFR portfolio are held for sale.