REMAX shareholders have overwhelmingly opted to cash out their shares ahead of the company’s acquisition by The Real Brokerage, triggering a proration mechanism as the $880 million deal heads toward an expected closing Monday.
Holders of roughly 18.5 million shares of REMAX Class A common stock elected to receive $13.80 per share in cash, according to preliminary election results released Thursday by Real and REMAX Holdings. Those elections would amount to roughly $255 million in cash — more than three times the $80 million maximum available under the merger agreement.
As a result, shareholders who elected cash will not receive the full $13.80 per share. Instead, they are expected to receive approximately $4.33 in cash and 0.3535 shares of the newly formed Real REMAX Group for each REMAX share they own.
Shareholders who elected stock, along with those who did not properly make an election by the Aug. 18 deadline, are expected to receive 0.515 shares of Real REMAX Group for each REMAX share. The results are preliminary, and the companies said the exact amount of cash and stock distributed to cash-electing shareholders will be determined once the election results are finalized.
The companies also provided a more specific timeline for completing the acquisition, saying they expect the transaction to close Aug. 24, subject to remaining closing conditions, including a final order from the Supreme Court of British Columbia.
Ahead of the merger, Real plans to complete a 10-for-1 consolidation of its shares at 4:01 p.m. ET on Aug. 24. Shares of the combined Real REMAX Group are then expected to begin trading on Nasdaq under Real’s existing REAX ticker when markets open Aug. 25.
Real and REMAX announced the acquisition in April after REMAX conducted a roughly seven-month strategic review and considered competing offers before selecting Real.
Shareholders of both companies overwhelmingly approved the transaction during separate special meetings Aug. 14, clearing one of the deal’s final major hurdles. Approximately 99 percent of votes cast by Real shareholders supported the transaction, while REMAX stockholders representing about 78.8 percent of voting power approved the deal.
The merger has continued moving toward completion amid changes to REMAX’s senior leadership and shareholder litigation challenging disclosures surrounding the acquisition.
REMAX President and Chief Growth Officer Chris Lim and Executive Vice President of Strategy Travis Saxton have said they will not continue with the combined company, while REMAX Holdings CEO Erik Carlson is expected to step down at closing and join Real REMAX Group’s board.
Real, REMAX and the new holding company are also facing two shareholder lawsuits filed in New York state court alleging deficiencies in the companies’ merger disclosures. The companies dispute the allegations and issued supplemental disclosures earlier this month in an effort to reduce the risk of litigation delaying the transaction.
