City Office REIT to be acquired by MCME Carell for $7.00 per share in cash

City Office REIT (CIO) announced that it has entered into a definitive merger agreement with MCME Carell Holdings, LP and MCME Carell Holdings under which, subject to the satisfaction of the conditions set forth in the merger agreement, MCME Carell will acquire all of the issued and outstanding shares of City Office for $7.00 per share of common stock in cash. Subject to the satisfaction of the conditions set forth in the merger agreement – which includes, among other things, the sale of the company’s Phoenix portfolio – holders of City Office’s common stock will receive $7.00 per share in cash at closing of the transaction. The transaction price represents a premium of 26% to City Office’s common stock closing share price on the NYSE on the last trading day prior to the announcement of the transaction, and a 39% premium to the volume weighted average share price on the NYSE over the previous 90 days. Upon the closing of the transaction, holders of the company’s 6.625% Series A Cumulative Preferred Stock will receive cash equal to $25.00 per share, plus all accrued and unpaid distributions up to, but excluding, the date the transaction is consummated. The transaction is valued at approximately $1.1B, including the assumption or repayment of indebtedness, the redemption of the company’s issued and outstanding preferred stock, and the sale of the company’s Phoenix portfolio. The transaction is expected to close in the fourth quarter of 2025 and is subject to the satisfaction of a number of customary closing conditions more thoroughly described in the merger agreement, including the approval of City Office shareholders. The transaction has been unanimously approved by City Office’s board of directors. The transaction is not conditioned upon the receipt of financing by the buyer. City Office will pay its previously announced second quarter dividend on July 24, but the City Office board of directors has resolved to suspend future quarterly common stock dividend payments through the expected close of the transaction. City Office will continue to pay regular quarterly dividends on its Series A Cumulative Preferred Stock. Upon completion of the transaction, City Office will become a private company and shares of City Office common stock and Series A Cumulative Preferred Stock will no longer trade on the NYSE. As a result of this announcement, the company does not plan to host a conference call or webcast to discuss its financial results for the quarter ended June 30, but expects to announce earnings before the market opens on July 31.