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KBS Strategic Opportunity to acquire Reven Housing for $56.85M in equity value.

KBS Strategic Opportunity REIT and Reven Housing announced the signing of a definitive merger agreement under which an indirect, wholly-owned subsidiary of SOR, SOR PORT, a wholly-owned subsidiary of SOR PORT Holdings, will acquire all of the outstanding shares of common stock of Reven for cash. The aggregate merger consideration payable for shares of Reven common stock in the merger will equal approximately $56.85M, to be increased or decreased, as the case may be, by the difference, if any, between the amount of Reven's unrestricted cash available for distribution as of the closing date of the merger, and $6,500,000. Based on Reven management's current estimate, the per share merger consideration payable to Reven stockholders in the merger is expected to be $5.15, which amount represents an approximately 21% premium to Reven's unaffected closing stock price of $4.25 on August 29, 2019, the last reporting day before Reven announced the signing of the merger agreement. Under the merger agreement, at the effective time of the merger, each unvested Reven restricted stock award will become fully vested and will be automatically converted into the right to receive the per share merger consideration for each share of Reven common stock underlying such award. In connection with the signing of the merger agreement, Parent has delivered to Reven an equity commitment letter, pursuant to which SOR has committed to purchase, directly or indirectly through one or more affiliated entities, equity securities of Parent for a maximum amount equal to the aggregate merger consideration payable under the merger agreement. The funding of the commitment under the equity commitment letter is not a condition to Parent's obligation to consummate the merger. The merger and the other transactions contemplated by the merger agreement have been unanimously approved by the Board of Directors of SOR and approved by the Board of Directors of Reven. The closing of the merger is expected to occur by the end of October, 2019, subject to satisfaction of all closing conditions. Reven's existing loan agreements with Arbor Agency Lending, an approved seller/servicer for Federal Home Loan Mortgage Corporation, are expected to remain outstanding following the closing of the merger.

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Publication:The Fly
Date:Sep 2, 2019
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