StoneMor, Inc. (NYSE: STON) is a Pennsylvania-based owner and operator of cemeteries and funeral homes across the United States. In total, the company maintains ownership of 304 cemeteries and 72 funeral homes across 24 states and Puerto Rico. Shares of the funeral home operator are surging 51% through early trading on Wednesday, May 25, 2022. Over the past three months, StoneMor has seen average daily volume of 134,930 shares. However, volume of 6 million shares or dollar volume of around $20.52 million, has already exchanged hands through early trading.
Shares of StoneMor are soaring after the company entered into a definitive agreement to be acquired by Axar Capital Management LP. Specifically, StoneMor will merger with and into a subsidiary of Axar Capital. Under the terms of the agreement, Axar Capital Management will acquire the company for $3.50 cash per share. This represents a 54.2% premium compared to StoneMor’s closing price from May 24, 2022.
The merger comes as Axar Capital, an existing major shareholder of StoneMor, proposed in September 2021 to focus on strategic alternatives for the funeral operator in order to return value to shareholders.
The acquisition agreement does hold a 60-day “go-shop” period where StoneMor will have the opportunity to search for alternative acquisition opportunities. Shareholders of StoneMor will still be tasked with voting to approve the merger. Additional customary closing conditions do apply.
“Our agreement with Axar delivers a significant premium for StoneMor’s stockholders and ensures a strong foundation for us to continue our expansion,” said Joe Redling, President and Chief Executive Officer. “Our Board firmly believes that this transaction is in the best interests of all of our stockholders other than Axar and its affiliates and delivers an ongoing commitment to excellence for our customers, employees and communities we serve.”
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