Steadfast Apartment REIT, Inc. Files Definitive Proxy for Merger with Independence Realty Trust, a Publicly Traded REIT
Steadfast Apartment REIT, Inc. owns and operates 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, is now planning to merge with Independence Realty Trust, Inc. (IRT).
On September 29, 2021, Steadfast Apartment REIT, Inc. filed its definitive proxy related to its previously announced merger with Independence Realty Trust, Inc. (NYSE: IRT).
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. According to Market Watch, IRT common stock closed at $21.00 per share on October 13, 2021, representing a 22% premium to the most recently estimated NAV per share.
Shares of Steadfast Apartment REIT were originally sold for $15.00 per share.
The merger is expected to close, pending stockholder approval, at a special stockholders meeting scheduled for December 13, 2021.
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.
CMG Partners and its affiliates launched an unsolicited tender offer on August 19, 2021 to purchase up to 125,000 shares of Steadfast Apartment REIT Inc. for $10.05 per share in cash. The REIT has suggested in a letter to shareholders that they reject the tender offer.
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.