Consortium Buying Spirit Finance for $1.6 Billion

Real estate investment trust Spirit Finance said Tuesday it accepted a takeover bid from a consortium led by Macquarie Bank for approximately $1.6 billion in cash, or $14.50 per share.

The purchase price represents an 11% premium over Spirit's closing price of $13.05 on the New York Stock Exchange Monday and a 15% premium over its 90-day average closing price.

Including about $1.9 billion in assumed debt, the deal is valued at $3.5 billion. The consortium also includes Kaupthing Bank hf. and other independent equity participants.

In addition, the consortium agreed to buy about 6.15 million shares of Spirit common stock at $12.99 each, or $79.9 million. Spirit will use proceeds from the private placement to fund real estate-related activities.

The transaction is expected to close by the end of the third quarter, subject to certain closing conditions including approval by Spirit's stockholders.

Under the merger agreement, Spirit Finance may solicit superior bids through April 9, and said its board will work with financial advisers to do so, although it has unanimously approved the Macquarie agreement and recommends that shareholders approve the deal.

Spirit Finance will pay its regular quarterly dividend for the quarter ending March 31, and will continue to pay dividends to shareholders on a pro-rated basis until the transaction is complete.

The company, which specializes in single-tenant, free-standing properties, counts restaurants as its largest tenants, and also offers commercial mortgage, business, and construction loans and equipment leases. For 2006, the company posted profit of $52.4 million on revenue of $188.6 million.