Steadfast Apartment REIT, Inc. Shareholders Approve Merger with Independence Realty Trust, a Publicly Traded REIT
According to an announcement on December 13, 2021, Steadfast Apartment REIT stockholders approved the previously announced merger transaction with Independence Realty Trust, Inc. Steadfast stockholders also voted to approve by advisory (non-binding) vote the compensation that may be paid or become payable to the named executive officers in connection with the merger.
Steadfast Apartment REIT, Inc. owned and operated apartment communities in targeted markets throughout the United States, according to its website. Steadfast Apartment REIT which acquired Steadfast Income REIT and Steadfast Apartment REIT III to focus on moderate-income apartments, has merged with and into Independence Realty Trust, Inc. (IRT).
According to SEC filings, the exchange ratio of IRT shares to be exchanged for STAR shares is fixed at 0.905 shares of IRT per STAR share. Based on the closing price at the time the merger was announced, this represented approximately a 16% premium to the most recent estimated NAV per share of STAR common stock, which is $15.55 as of December 31, 2020. Shares of Steadfast Apartment REIT were originally sold for $15.00 per share.
On a pro forma basis, the combined company will reportedly own a portfolio of 131 apartment communities comprising approximately 38,000 units across 16 states in the Sunbelt. The combined company is expected to have a pro forma equity market capitalization of approximately $4 billion and a pro forma total enterprise value of approximately $7 billion, according to the announcement.
The White Law Group continues to investigate potential securities claims involving the liability that brokerage firms may have for recommending Steadfast Apartment REIT to investors.
How Does a Merger Affect Shareholders?
Companies often merge as part of a strategic effort to boost shareholder value, often by creating new business lines and/or gaining greater market share. However, the economic environment at the time of the merger, size of the companies and management of the merger process all play a part in future returns for shareholders.
Shareholders may experience a significant loss of voting power, and while the spike in trading volume tends to inflate share prices, if economic conditions are not favorable at the time of the merger, shareholders may see significant losses.
Recovery of Investment Losses
The trouble with non-traded REITs is that they are complex and inherently risky products.
Lack of liquidity is often problematic for many investors. Investors looking to sell often have difficulty finding a buyer, and can suffer significant losses on the sale.
Broker dealers are required to inform clients of the risks associated with investment recommendations and to ensure that those recommendations are suitable for the investor in light of the investor’s age, risk tolerance, net worth, and investment experience. Firms that fail to do so, may be held responsible for any losses.
If you have suffered losses investing in Steadfast Apartment REIT, please contact The White Law Group at 888-637-5510 for a free consultation.
For more information on the firm’s investigations please see:
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington. For more information on the firm, visit www.WhiteSecuritiesLaw.com.
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