Shares of real estate investment trust Arlington Asset Investment Corp. (NYSE:AAIC) are skyrocketing today after it agreed to be acquired by Ellington Financial (NYSE:EFC). The former is a real estate investment trust with a focus on mortgage-related and other assets.
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The acquisition is expected to offer increased scale and better access to capital markets for EFC while also driving earnings accretion and long-term growth for the company.
Further, each Arlington share will be converted into 0.3619 Ellington shares. Arlington investors also stand to receive $0.09 per share in cash and the transaction points to a $4.77 offer price for each Arlington share.
The transaction is expected to close in the fourth quarter of this year and upon closure, Ellington investors are expected to own about 85% of the combined entity.
Overall, the Street has a $13.95 consensus price target on EFC alongside a Strong Buy consensus rating. AAIC shares have already skyrocketed nearly 52% at the time of writing.
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