Benzinga | Nov 23, 2020 07:37AM EST

Front Yard Residential Signs Amended Merger Agreement With Pretium And Ares Management To Increase Consideration From $13.50/Share To $16.25/Share



CHRISTIANSTED, U.S. Virgin Islands, Nov. 23, 2020 (GLOBE NEWSWIRE) -- Front Yard Residential Corporation ("Front Yard" or the "Company") (NYSE:RESI), an industry leading provider of high-quality and affordable rental homes, announced today that it has amended its definitive merger agreement with a partnership led by Pretium and including funds managed by the Real Estate Equity and Alternative Credit strategies of Ares Management Corporation (NYSE:ARES) (together, the "Pretium Partnership") to increase the consideration payable to holders of outstanding shares of Front Yard stock to $16.25 per share in cash from $13.50 per share in cash, which values the Company at approximately $2.5 billion, including debt to be assumed or refinanced. The revised transaction price represents a 63% premium over Front Yard's closing share price on October 16, 2020, the last trading day prior to the date on which the Company entered into the merger agreement.

Front Yard and the Pretium Partnership negotiated the amendment following the receipt by Front Yard of an unsolicited binding proposal (the "Proposal") from an unaffiliated third party to acquire all outstanding shares of Front Yard common stock. The board of directors (the "Board") of Front Yard, in consultation with its legal and financial advisors, carefully considered the terms of the Proposal and the amended Pretium Partnership transaction and determined that entering into the amendment to the Pretium Partnership merger agreement was in the best interests of Front Yard and its stockholders. Front Yard's Board approved the amended merger agreement and recommends that Front Yard's stockholders vote in favor of the amended Pretium Partnership merger agreement.

"We are confident in the strategic and financial rationale of this transaction, and continue to believe it is the best way to maximize immediate cash value for our stockholders," said George Ellison, Chief Executive Officer of Front Yard.

"After receiving a binding proposal reflecting a higher purchase price for Front Yard, Front Yard advised the Pretium Partnership of the proposal as required by the terms of the merger agreement, which led to the Pretium Partnership increasing the price of our transaction with them," said Rochelle R. Dobbs, Front Yard's Chair of the Board. "Following these discussions, our Board approved the amendment to the merger agreement. We believe the amended merger agreement is a result of a well-run sales process that allows our stockholders to realize higher value for their shares."

"We believe in this Company and the Front Yard team and remain committed to completing this transaction," said Don Mullen, Pretium's Chairman and Chief Executive Officer.

Front Yard will file a current report on Form 8-K with the U.S. Securities and Exchange Commission containing a summary of the terms and conditions of the amendment to the definitive merger agreement.

The transaction is expected to close in the first quarter of 2021, subject to the approval of the holders of a majority of Front Yard's outstanding shares and the satisfaction of customary closing conditions.