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REUTERS
Commercial real estate manager NorthStar Asset Management Group Inc , REIT NorthStar Realty Finance Corp and private equity firm Colony Capital Inc have agreed to an all-stock merger that would create a company with $58 billion of assets under management, they said onMonday.
NorthStar Realty Finance shares fell 5.8 percent to $12.70, while NorthStar Asset Management dropped 6.5 percent to $11.51.
NorthStar Asset Management shareholders will own about 32.85 percent, Colony Capital shareholders about 33.25 percent and NorthStar Realty Finance shareholders about 33.90 percent of the combined company — Colony NorthStar Inc — on a fully diluted basis, the companies said.
NorthStar Asset Management was spun off from NorthStar Realty Finance in 2014.
Colony Capital Chief Executive Richard Saltzman will become CEO of Colony NorthStar, while the PE firm’s founder Thomas Barrack will become the executive chairman.
The companies said they expected about $115 million in total annual savings from the merger, likely to close during the first quarter of 2017.
The deal, which would create an internally managed equity REIT, has been approved by the committees and the board of all the companies.
Colony Capital was working with NorthStar Realty Finance for a “tri-party all-stock” proposal, the companies said in May.
NorthStar Asset Management was advised by Goldman Sachs, while UBS Investment Bank was adviser to NorthStar Realty Finance.
BofA Merrill Lynch is the lead financial adviser to Colony, and Barclays, Credit Suisse, Deutsche Bank, JP Morgan and Morgan Stanley are also providing financial advice in connection with the merger.