Annaly Capital Management Announces Acquisition Of Hatteras

Annaly Capital Management, Inc. NLY, a mortgage real estate investment trust company, announced on Monday it has entered into an agreement to acuire Hatteras Financial Corp. HTS for $15.85 per share.

Shares of Hatteras, a managed mortgage real estate investment trust, closed on Friday at $14.25. The deal implies a 24 percent premium to the 60-day volume-weighted average price of Hatteras common stock ending April 8 and a multiple of 0.85x Hatteras' estimated book value per share as of the end of February.

Hatteras' stock gained more than 8 percent and was trading at $15.46 early Monday morning. At the same time, shares of Annaly were lower by nearly 3 percent at $10.10.

As part of the deal, Hatteras investors would receive either $5.55 in cash and 0.9894 shares of Annaly common stock for each share owned, or $15.85 in cash.

Annaly expects the transaction to be accretive to its book value per share and core earnings in 2016. The transaction also expands its and diversifies its investment portfolio and reinforces its stature as an industry leader.

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Boards Unanimously Approve Deal

The deal has already been unanimously approved by the board of directors of both companies and is expected to close by the end of the third quarter.

"This strategic transaction represents a unique and sizeable value creation opportunity for our shareholders," commented Kevin Keyes, CEO and president of Annaly. "With the acquisition of Hatteras, we significantly grow our diversified portfolio and broaden our investment options, further fortifying Annaly's position as the market leading mortgage REIT." Wellington Denahan, chairman of Annaly, added, "We are tremendously excited to announce this partnership today. Both Hatteras and Annaly are seasoned veterans in the sector, and we are confident this acquisition strengthens our ability to deliver superior returns to our shareholders over the long-term."

Michael R. Hough, chairman and CEO of Hatteras, said, "We are excited by the opportunity to join the Annaly platform and believe our diversification efforts are greatly enhanced by the industry-leading business Annaly has built. The complementary nature of this transaction should enhance the risk-adjusted value proposition we've always strived for." Jeffrey D. Miller, Lead Independent Director of Hatteras, added: "The strategic combination with Annaly will offer our shareholders increased scale, diversification and liquidity, which we believe will result in higher and more sustainable shareholder value over the long-term."