Realty Income Corporation (NYSE:O) entered into a definitive merger agreement to acquire Spirit Realty Capital, Inc. (NYSE:SRC) from The Vanguard Group, Inc., BlackRock, Inc. (NYSE:BLK), Cohen & Steers, Inc. (NYSE:CNS), FMR LLC, State Street Corporation (NYSE:STT) and others for an enterprise of $9.3 billion on October 29, 2023. Under the terms of the transaction, Realty Income will acquire Spirit in an all-stock transaction valued at an enterprise value of approximately $9.3 billion. Spirit shareholders will receive 0.762 newly-issued Realty Income common shares for each Spirit common share they own. Each share of Spirit Series A Preferred Stock issued and outstanding shall be automatically converted into one (1) newly issued share of Realty Income Series A Preferred Stock. Each Spirit Restricted Stock Award and Performance Share Award that is outstanding shall be canceled and automatically converted into the right to receive (i) a number of newly issued shares of Realty Income Common Stock. At closing, this will result in Realty Income and Spirit shareholders owning approximately 87% and 13%, respectively, of the combined company. Upon termination of the Merger Agreement in certain circumstances, Spirit will be required to pay a termination fee to Realty Income in an amount equal to $173.97 million, However, the termination fee will be $93.68 million if the board of directors approves any unsolicited Alternative Superior Proposal.

The transaction is subject to approval by Spirit?s stockholders, the effectiveness of the registration statement on Form S-4, merger must qualify as a ?reorganization? within the meaning of Section 368(a) of the Internal Revenue Code of 1986, and approval for listing on the New York Stock Exchange (? NYSE ?) of the shares of Realty Income Common Stock to be issued in the Merger. The Board of Directors of Spirit as well as Realty Income has unanimously approved the transaction. On January 19, 2024, shareholders of Spirit Realty Capital approved the transaction. On December 14, 2023, Spirit Realty anticipate that Realty Income will issue approximately 107,863,086 shares of Realty Income common stock and 6,900,000 shares of Realty Income Series A preferred stock in connection with the merger. The Spirit special meeting will be held virtually on January 19, 2024. The transaction is expected to close during the first quarter of 2024. As of January 19, 2024, the transaction is expected to close on January 23, 2024.

Wells Fargo is serving as the sole financial advisor and Charles Ruck, Darren Guttenberg, Bradley Helms, Ana O'Brien, William Kessler, Maj Vaseghi, Meghan Cocci, Betsy Jaffe, Christopher Norton, Kenneth Askin, Yvette Valdez, David Kuiper and Andrew Baker of Latham & Watkins is acting as legal advisors to Realty Income. J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are serving as financial advisors as well as fairness opinion providers and Adam O. Emmerich and Karessa L. Cain of Wachtell, Lipton, Rosen & Katz is acting as legal advisors to Spirit. Stuart Rogers of Alston & Bird LLP represented Wells Fargo Securities, LLC as financial advisor. Barclays is acting as financial advisor to Realty Income. D.F. King & Co., Inc. acted as proxy solicitor to Spirit Realty. Spirit Realty as agreed to pay them a fee of approximately $20,000, plus reasonable expenses, for these services. Spirit has agreed to pay J.P. Morgan a fee of up to $25 million, $2 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. J.P. Morgan, Morgan Stanley and Wachtell Lipton acted as due diligence provider to Spirit Realty. Rob Salter, Lorna Edwards, Iain Brown, Jo Owen, Laura Maclennan, Harry Penfold, Matt Davies, James Clark, Dylan Carty, Kit Lee, Wing Tang, Aleks Owczarska, Toby Barker, Dhaksha Giga, Elizabeth Emerson, Chris Robinson, Rob Salter, Jamie Sanderson of DLA Piper LLP (US) acted as legal advisors for Realty Income Corporation. Spirit agreed to pay Morgan Stanley a fee of up to $25 million for its services, $2 million of which was payable upon the rendering of its opinion. Venable LLP acted as legal advisor to Realty.

Realty Income Corporation (NYSE:O) completed the acquisition of Spirit Realty Capital, Inc. (NYSE:SRC) from The Vanguard Group, Inc., BlackRock, Inc. (NYSE:BLK), Cohen & Steers, Inc. (NYSE:CNS), FMR LLC, State Street Corporation (NYSE:STT) and others January 23, 2024. The common stock of the combined company will trade under the symbol "O" on the New York Stock Exchange, beginning today. The closing follows the satisfaction of all conditions to the closing of the merger. At the closing of the merger, all of Spirit's outstanding shares of Series A Cumulative Redeemable Preferred Stock were also exchanged for shares of Realty Income Series A Cumulative Redeemable Preferred Stock, which will trade under the symbol "O PR" on the New York Stock Exchange following the closing. The transaction is immediately accretive on a leverage neutral basis. Bank of America acted as financial advisors to Realty Income. Mizuho Financial Group, RBC Wealth Management and Goldman Sachs also served as financial advisors to Spirit.