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Related Makes Bid for CRE Lender Ladder Capital

Takeover Offer Would Expand Partnership Began a Year Ago; Values Ladder at $1.6 Billion
January 16, 2018
Justin Metz, president of Related Fund Management

A subsidiary of New York developer and investor the Related Cos. made a cash bid this past weekend to acquire commercial real estate lender Ladder Capital Corp. (NYSE:LADR).

Related Fund Management LLC is proposing to acquire all of the outstanding shares of Ladder for $15 per share through a two-step tender offer and merger process, subject to certain conditions.

Ladder Capital said it intends to promptly and carefully review the proposal.

With $5.9 billion in total assets and $1.5 billion of book equity as of Sept. 30, 2017, Ladder Capital is one of the largest internally-managed publicly traded REITs in its space.

Ladder Capital closed trading last week at about $13.60 per share. It has been trading this morning at about $14.50 - giving it a market capitalization of about $1.61 billion.

If the deal goes through, Ladder would become a privately held entity. Related currently owns about 8.2% of the outstanding stock of Ladder.

Last year at this time, Related purchased $80 million of Ladder stock from shareholders, including affiliates of TowerBrook Capital Partners and GI Partners.

At that time, Justin Metz, managing principal of Related Fund Management said, "Ladder's strong and seasoned management team operates a disciplined and differentiated mortgage-focused lending platform and we believe the company is undervalued by the public marketplace."

At the time of that investment, Ladder was trading at about $14.10/share.

In its takeover proposal letter to Ladder Capital, Related's Metz said the firm intends "to continue to expand the current company platform, particularly with respect to the asset management business, by raising additional capital."

Metz added that it anticipated that it would retain the majority of Ladder's employees.

Evercore Group LLC and Sullivan & Cromwell LLP are advising Related.

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