GOVERNMENT PROPERTIES INCOME TRUST (NASDAQ:GOV) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry into a Material Definitive Agreement.
Agreement and Plan of Merger
On September14, 2018, we and our wholly owned subsidiary, GOV MS REIT, a Maryland real estate investment trust, or Merger Sub, and Select Income REIT, a Maryland real estate investment trust, or SIR, entered into an Agreement and Plan of Merger, or the Merger Agreement, to which, on the terms and subject to the satisfaction or waiver of the conditions thereof, SIR has agreed to merge with and into Merger Sub, with Merger Sub continuing as the surviving entity in the merger, or the Merger. to the terms and subject to the conditions and limitations set forth in the Merger Agreement, at the effective time of the Merger, or the Effective Time, each common share of beneficial interest, $.01 par value per share, of SIR, or SIR Common Shares, issued and outstanding immediately prior to the Effective Time (other than SIR Common Shares held by us or any of our or SIR’s wholly owned subsidiaries) will be converted into the right to receive 1.04, or the Exchange Ratio, of our common shares of beneficial interest, $.01 par value per share, or GOV Common Shares, subject to adjustment as described in the Merger Agreement with cash paid in lieu of fractional shares. Under the Merger Agreement, the Exchange Ratio is fixed and will not be adjusted to reflect changes in the market price of the GOV Common Shares or the SIR Common Shares prior to the Effective Time. Prior to the Effective Time, we will amend our declaration of trust to increase the number of authorized GOV Common Shares from 150,000,000 to 200,000,000.
to the Merger Agreement, at the Effective Time, any outstanding unvested SIR Common Share awards under SIR’s equity compensation plan will be converted into an award under our equity compensation plan, subject to substantially similar vesting requirements and other terms and conditions, of a number of GOV Common Shares determined by multiplying the number of unvested SIR Common Shares subject to such award by the Exchange Ratio (rounded down to the nearest whole number).
to the Merger Agreement, we and SIR have agreed that, prior to the Effective Time, we will sell, for cash consideration, the 24,918,421 SIR Common Shares beneficially owned by us, or the Secondary Sale, and, subject to the satisfaction of certain conditions, SIR will declare and pay a pro rata distribution to its shareholders of the 45,000,000 common shares of beneficial interest, $.01 par value per share, of SIR’s majority owned subsidiary,Industrial Logistics Properties Trust, a Maryland real estate investment trust, or ILPT, owned by SIR, or the ILPT Distribution. The Merger and the other transactions contemplated by the Merger Agreement, including the Secondary Sale and the ILPT Distribution, are collectively referred to herein as the Transactions.
We expect that immediately after the merger of SIR into Merger Sub is effective, Merger Sub will then merge with and into us, with us as the surviving entity, and we will change our name to “Office Properties Income Trust,” following which our ticker symbol on The Nasdaq Stock Market LLC, or Nasdaq, will be changed to “OPI”. We also expect that immediately following that second merger, we will effect a reverse stock split of the GOV Common Shares to which every four common shares of the combined company will be converted into one common share of the combined company, or the Reverse Stock Split. The combined company will continue to be managed by The RMR Group LLC, or RMR LLC, our and SIR’s manager.
The completion of the Merger is subject to the satisfaction or waiver of various conditions, including, among other things: (1)approval of the Merger and the other transactions contemplated by the Merger Agreement to which SIR is a party by at least a majority of all the votes entitled to be cast by holders of outstanding SIR Common Shares entitled to vote at the special meeting of SIR’s shareholders held for that purpose; (2)approval of the issuance of GOV Common Shares to be issued in the Merger, or the Merger Share Issuance, by at least a majority of all the votes cast by the holders of outstanding GOV Common Shares entitled