NEWARK, N.J. - Prudential Mortgage Capital, the commercial mortgage unit of Prudential Insurance Co., said Wednesday that it had agreed to buy WMF Group Ltd. of Vienna, Va., for $138 million.

Prudential would pay WMF's stockholders $8.90 per share, almost 50% more than the stock's Tuesday closing price. The stock soared on the deal announcement and was trading Thursday at $8.625 a share.

The deal is expected to close by the end of this quarter. It would create a commercial mortgage giant with more than $31 billion of assets. The two companies originated $5.5 billion of loans last year.

The merged company would be the largest originator of Fannie Mae and FHA multifamily loans. WMF's Carbon Mesa unit would give Prudential entrée into the high-yield real estate debt business.

WMF's chairman and chief executive, Shekar Narasimhan, will stay with the company as head of its agency and asset management businesses. Credit Suisse First Boston advised WMF on the sale.

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