(Bloomberg)—Amherst Holdings LLC is in advanced discussions to acquire Front Yard Residential Corp., a single-family landlord that put itself on the block in May after settling with an activist investor, according to people familiar with the matter.
Talks are ongoing and may still fall apart, the people said, asking not to identified because the talks are private.
Front Yard’s shares rose about 11% to $12.83 at 3:18 p.m. in New York trading, before being halted. The company has a market value of about $691 million.
Representatives for Front Yard and Amherst declined to comment.
Front Yard launched a strategic review in May as part of a settlement with activist investor Snow Park Capital Partners. The real estate investment trust also added two new directors as part of the deal and said it would consider selling the business.
Front Yard had more than 14,000 rental houses in Georgia, Florida, Texas and other U.S. states at the end of September, according to a filing. In August 2018, Front Yard acquired a portfolio of 3,200 rental homes and a property management company for $485 million.
The company, which is based in Christiansted, U.S. Virgin Islands, said during a conference call last month that it expected to announce the results of the review “shortly.” Front Yard has more than $1.6 billion in debt, according to data compiled by Bloomberg.
Snow Park argued earlier this year that Front Yard’s shares were trading at a substantial discount to the underlying value of its assets. It also said the company was plagued by poor decision making and a lack of urgency to address its “existential” issues. Snow Park has since sold out of the stock, according to a regulatory filing in September.
Amherst sponsors and develops companies that help institutional investors underwrite and manage their U.S. real estate investments, according to its website. The firm’s property management arm, Main Street Renewal, offers single-family rentals across the U.S.
--With assistance from Kiel Porter.
To contact the reporters on this story: Scott Deveau in New York at [email protected];
Gillian Tan in New York at [email protected]; Patrick Clark in New York at [email protected].
To contact the editors responsible for this story: Liana Baker at [email protected]
Craig Giammona, Matthew Monks
© 2019 Bloomberg L.P.
