Starwood Offers to Buy Crexus at 20% Premium

Just days after Crexus International (NYSE:CXS) announced its plan to buy a package of loans from Barclays expiring this year, Starwood (NASDAQ:STWD) offered to acquire Crexus on Monday for roughly $254 million a share.

In a deal that would create the nation’s largest commercial mortgage real estate investment trust, Starwood’s $14 a share bid represents a 20% premium over Crexus' trading price Monday morning, before the talks were made public.

The catch, however, is that the deal is subject to Crexus suspending its current equity offering. Last week Barclays said it was selling a portfolio of real estate loans to the property investment trust for $586 million.

In a statement, Crexus said suspending its transaction with Barclays would cause the company to break one of the conditions of the contract. While it has not suspended the deal, its board is evaluating the offer.

Starwood, which said it feared the acquirement of loans set to mature this year would cause Crexus’ dividend to fall until new investments could be acquired, noted it would be willing to complete the Barclays transaction, though it requires up to give business days to review the portfolio.

The company claimed that the short maturity date is “less of an issue” for Starwood because of its market capitalization and proven ability to originate new loans. While it would help to close the deal with Barclays, Starwood said the completion of the transaction is not a condition of its offer.

Starwood has increased dividends to shareholders every quarter since its inception in August 2009.