Ellington Financial buying Arlington Asset Management in $1 bln deal

Arlington Asset Investment Corp.’s stock
AAIC,
+49.31%
is rallying 50% in premarket trades Tuesday after Ellington Financial Inc.
EFC,
-3.22%
said it would pay about $4.77 a share for the real estate investment trust in a cash and stock acquisition. The estimated market capitalization of the combined company is expected to exceed $1 billion. Under terms of the deal, each share of Arlington common stock will be converted into 0.3619 shares of Ellington Financial common stock, or approximately 11.7 million shares of Ellington Financial common stock. Arlington common stockholders will also receive $3 million in cash or 9 cents a share, to be contributed by Ellington Financial’s external manager. Ellington stock is down 4% in premarket trades.