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Investing.com -- City Office REIT Inc (NYSE:CIO) stock surged 24.5% after the company announced it has entered into a definitive merger agreement with MCME Carell Holdings to be acquired for $7.00 per share in cash.
The transaction values City Office at approximately $1.1 billion, including the assumption or repayment of debt, redemption of preferred stock, and the sale of the company’s Phoenix portfolio. The offer price represents a 26% premium to City Office’s closing share price on the last trading day before the announcement and a 39% premium to its 90-day volume-weighted average price.
"After conducting an extensive process to explore potential strategic alternatives, we are pleased to have reached an agreement with MCME Carell," said James Farrar, City Office’s Chief Executive Officer. "In light of a challenging environment for the office sector, this Transaction (JO:NTUJ) delivers immediate and significant value to our shareholders."
Under the agreement, holders of City Office’s 6.625% Series A Cumulative Preferred Stock will receive $25.00 per share plus all accrued and unpaid distributions upon closing. The transaction, unanimously approved by City Office’s Board of Directors, is expected to close in the fourth quarter of 2025, subject to shareholder approval and other customary closing conditions.
Following the announcement, City Office’s Board has suspended future quarterly common stock dividends through the expected close of the transaction, though it will pay its previously announced second quarter dividend on July 24, 2025. The company will continue to pay regular quarterly dividends on its preferred stock.
Upon completion of the deal, City Office will become a private company, and its shares will no longer trade on the NYSE. Raymond (NSE:RYMD) James & Associates and Jones Lang LaSalle Securities served as City Office’s financial advisors for the transaction.
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