Redfin Corporation (RDFN): $10.70
Market Cap: $1.37 B
Deal Size: $1.75 B
A couple of years ago, I got a chance to meet with the CEO and Chief Operating Officer of Benzinga in Detroit and I remember them telling me that the mortgage originator Rocket Companies (RKT) was situated in the same building. I was familiar with Rocket Companies because for a short period of time a few years ago, I had invested in the company. The investment did not work out and I exited when I realized mortgage originators were likely to be in an extended period of weakness.
Last week Rocket Companies announced that it was acquiring the online real estate listing and brokerage company Redfin (RDFN) in an all stock deal worth $1.75 billion or about $12.50 per share at the time of announcement. The premium was a very healthy 115% from the prior day’s trading price and 59% based on a 30 day average trading price. The deal is currently trading at a spread of 10.15% or 18.62% annualized. Under the terms, each Redfin share will be exchanged for 0.7926 shares of Rocket Companies Class A common stock.