Omega Healthcare to buy out rival Aviv in all-stock deal valued at $3 billion

Omega Healthcare will buy rival real estate investment trust Aviv in a $3 billion all-stock deal combining two companies that each run hundreds of nursing homes.

Aviv shareholders will receive a portion of Omega stock valued at $34.97 for each Aviv share in a deal designed to be tax-free to shareholders, the companies said Friday. That represents a premium of more than 16 per cent to Omega’s closing price Thursday.

Omega shareholders will own about 70 per cent of the combined company, and Omega CEO Taylor Pickett will stay on as chief executive. Aviv Chairman and CEO Craig Bernfield will join the combined company’s board, along with two other directors from Aviv.

The deal is expected to close in next year’s first quarter.

Hunt Valley, Maryland-based Omega’s portfolio includes 562 nursing homes, assisted living properties and specialty hospitals. Aviv, which is based in Chicago, owns 312 properties.

Shares of Aviv REIT Inc. jumped nearly 15 per cent, or $4.40, to $34.50 in premarket trading, while Omega Healthcare Investors Inc. rose 5 cents to $38.90.