Why Container Lessor Textainer's Shares Are Jumping Today

Cargo containers leasing company Textainer Group Holdings Ltd TGH has entered into a definitive agreement to be acquired by Stonepeak, an alternative investment firm specializing in infrastructure and real assets.

Textainer common shareholders will receive $50.00 per share in cash, with the total value of the shares totaling about $2.1 billion.

The transaction represents an enterprise value of approximately $7.4 billion. 

The purchase price represents a premium of about 46% over Textainer's closing share price on October 20, 2023.

Upon completion of the transaction and the redemption of Textainer's series A and B cumulative redeemable perpetual preference shares, Textainer will become a privately held company.

"By partnering with Stonepeak, we will gain access to investment capital and industry expertise, positioning us for continued growth in the years to come," said President and CEO Olivier Ghesquiere.

The transaction is expected to close in the first quarter of 2024. Prior to closing, Textainer intends to maintain its current quarterly dividend on both the Textainer common and preference shares.

The definitive merger agreement includes a 30-day "go-shop" period expiring at 12:01 a.m. Eastern Time on November 22, 2023, which permits Textainer and its financial advisor to continue to actively solicit and consider alternative acquisition proposals.

Shortly after completion of the transaction, Textainer common shares will no longer be listed on the NYSE and Johannesburg Stock Exchange.

Price Action: TGH shares are trading higher by 42.2% at $48.56 in premarket on the last check Monday.

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