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Investing.com -- Paramount Group, Inc. (NYSE:PGRE) stock plunged 12% after the company announced it has entered into a definitive agreement to be acquired by Rithm Capital Corp. in an all-cash transaction valued at approximately $1.6 billion.
Under the terms of the agreement, Rithm will acquire all outstanding shares of Paramount common stock for $6.60 per fully diluted share. The deal represents a significant discount to Paramount’s previous closing price of $7.39, explaining the sharp decline in the stock.
The acquisition will provide Rithm with a portfolio of 13 owned and 4 managed Class A office properties in New York City and San Francisco, totaling more than 13.1 million square feet. As of June 30, 2025, approximately 85.4% of the portfolio was leased.
Martin Bussmann, Lead Independent Director of Paramount, stated that after evaluating various strategic alternatives, the board believes the deal with Rithm "will deliver immediate, full and fair value to our shareholders," despite the transaction price being below the previous market value.
Rithm plans to fund the acquisition using a combination of cash from its balance sheet and potential co-investment opportunities. The company views the deal as a "generational opportunity" to expand its commercial real estate footprint and asset management capabilities.
The transaction, which has been approved by the boards of both companies, is expected to close in late Q4 2025, subject to approval by Paramount’s common stockholders and other customary closing conditions.
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