Office Properties Income Trust (NasdaqGS:OPI) entered into a definitive merger agreement to acquire Diversified Healthcare Trust (NasdaqGS:DHC) from Flat Footed LLC and others for approximately $410 million on April 11, 2023. Pursuant to the terms of the merger agreement, DHC shareholders will receive 0.147 shares of OPI for each common share of DHC based on a fixed exchange ratio. DHC shareholders will own approximately 42% of the combined company, and OPI shareholders will own approximately 58% of the combined company. OPI will be the surviving entity in the merger and expects to change its name to ?Diversified Properties Trust? upon the closing of the transaction and to continue to trade on The Nasdaq Stock Market LLC. DHC will pay a termination fee of $5.9 million to OPI, in case DHC terminates and the transaction, and OPI will pay a termination fee of $11.2 million in case OPI terminates the transaction. The combined company will be led by the OPI executive management team, will be managed by The RMR Group (Nasdaq: RMR) and will be headquartered in Newton, MA. OPI has secured a commitment from JPMorgan Chase Bank, NA for a $368 million bridge loan facility to help finance closing of the transaction.

The transaction is subject to the approval of DHC and OPI shareholders, effectiveness of the registration statement on Form S-4, approval of the Nasdaq Stock Market LLC of the listing of the OPI Common Shares to be issued in the merger, OPI shall have received the written opinion of its special counsel, to the effect that the merger will qualify as a ?reorganization? within the meaning of Section 368(a) of the Code. and other customary closing conditions. The transaction was unanimously recommended by special committees of the respective Board of Trustees of OPI and DHC, comprised of independent, disinterested trustees, and unanimously approved by the respective Board of Trustees. OPI and DHC will each hold special meetings of their respective shareholders on August 30, 2023 in connection with the merger. As per filling on August 2, 2023, Flat Footed LLC a top shareholder of Diversified Healthcare Trust urges fellow shareholders to vote against the proposed merger with Office Properties Income Trust. The transaction is expected to close during the third quarter of 2023. JPMorgan Chase Bank, NA arranged OPI?s bridge loan. The merger is expected to be immediately accretive to DHC shareholders on a pro rata basis and is expected to result in annual general and administrative savings of approximately $2 million to $3 million.

BofA Securities is acting as exclusive financial advisor and Melissa Sawyer and Lauren S. Boehmke of Sullivan & Cromwell LLP is acting as legal advisor to the special committee of DHC?s Board of Trustees in this transaction. BofA Securities,?Inc. acted as fairness opinion provider to DHC's special committee. J.P. Morgan Securities LLC is acting as exclusive financial advisor and Robin Panovka and Mark A. Stagliano of Wachtell, Lipton, Rosen & Katz is acting as legal advisor to the special committee of OPI?s Board of Trustees in this transaction. J.P. Morgan Securities LLC acted as fairness opinion provider to OPI's Board of Directors and special committee. The transfer agent and registrar for OPI Common Shares is Equiniti Trust Company. For financial advisory services rendered in connection with the Merger, OPI has agreed to pay J.P. Morgan an estimated fee of $15 million, $3 million of which became payable to J.P. Morgan at the time J.P. Morgan delivered its opinion and the remainder of which is contingent and payable upon the consummation of the Merger. OPI has engaged MacKenzie Partners, Inc. (?MacKenzie?) to assist it in the solicitation of proxies, for which OPI anticipates that it will pay MacKenzie an estimated fee of $20,000, plus reimbursement of expenses. DHC has engaged D.F. King & Co., Inc. to assist it in the solicitation of proxies, for which DHC anticipates that it will pay D.F. King an estimated fee not to exceed $350,000, plus reimbursement of expenses. DHC has agreed to pay BofA Securities for its services in connection with the Merger an aggregate fee of $15 million, $2.5 million of which was payable upon delivery of BofA Securities? opinion and the remainder of which is payable contingent upon the consummation of the merger.

Office Properties Income Trust (NasdaqGS:OPI) cancelled the acquisition of Diversified Healthcare Trust (NasdaqGS:DHC) from Flat Footed LLC and others on September 1, 2023. The mutual termination was approved by the respective Special Committees and Boards of Trustees of OPI and DHC. The parties have agreed that each company will bear its costs and expenses in connection with the terminated transaction, and that neither party will pay any termination fee as a result of the mutual decision to terminate the merger agreement.