Why Arlington Asset Investment Corp Shares Are Soaring Today

Arlington Asset Investment Corp AAIC shares are trading higher Tuesday after Ellington Financial announced plans to acquire the company.

What To Know: The pair of real estate trust companies entered into a definitive merger agreement in which Ellington Financial will acquire Arlington. Arlington shareholders will receive 0.3619 shares of Ellington for each share held, plus 9 cents per share in cash, which implies a total offer price of $4.77 per Arlington share.

Upon closing, Ellington shareholders are expected to own approximately 85% of the combined company and Arlington shareholders are expected to own approximately 15%. Additionally, Ellington will assume Arlington's outstanding preferred equity, senior unsecured notes and trust preferred securities.

Following the announcement, JonesTrading analyst Jason Stewart reiterated Arlington with a Buy rating and a price target of $5.50.

Arlington is a real estate investment trust that invests primarily in mortgage-related and other assets.

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AAIC Price Action: Arlington shares were up 52.4% at $4.19 at the time of publication, according to Benzinga Pro.

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