Centerspace would be acquired by IRT in an all-stock merger, with each share converting into the right to receive 3.8 IRT common shares. Investors also face approval, registration, listing and tax conditions, while termination fees reach $45 million for IRT and $60 million for Centerspace.

Key Highlights

  • Centerspace may pay regular quarterly dividends of up to $0.77 per share before closing.
  • Certain termination circumstances would require Centerspace to pay IRT $45 million.
  • Series D and Series E preferred units would convert into IROP preferred units with exchange features tied to 1.37931 and 1.20482.

Centerspace (NYSE: CSR) agreed to an all-stock Acquisition by Independence Realty Trust, with each outstanding common share set to convert into the right to receive 3.8 shares of IRT common stock. The transaction remains subject to Shareholder approvals, regulatory and tax conditions, and other closing requirements.

Stock Merger Sets Exchange Terms

Centerspace would survive as a wholly owned IRT subsidiary, while Centerspace, LP would become a Subsidiary of IRT’s operating partnership. Company OP common units would convert into IROP common units based on the 3.8 exchange ratio, with fractional units rounded up for each holder. Unvested restricted stock units and performance-based awards would receive specified treatment based on the exchange ratio. Centerspace stock Options would convert into IRT options, with their underlying shares and exercise prices adjusted under the agreement.

Approval Conditions and Termination Fees

The merger requires approval by Centerspace shareholders and IRT shareholders, an effective registration statement, authorization to list the new IRT shares on the New York Stock Exchange, and tax and REIT opinions. The agreement also requires compliance with representations, warranties and covenants. In certain cases, Centerspace must pay IRT a $45 million termination fee, while IRT must pay Centerspace a $60 million fee. Before closing, Centerspace may pay regular quarterly cash dividends of up to $0.77 per share, while IRT may pay up to $0.18 per share. The agreement also provides for representation of Centerspace independent trustees on the IRT board, subject to committee evaluation.