The acquisition is the latest in a series of deals as healthcare real estate companies look to take advantage of rising demand for senior care facilities in a consolidating sector.

Analysts said Health Care's offer fairly valued HealthLease.

They said chances of a rival bid were slim as it would be difficult to outbid Health Care, one of the largest U.S. healthcare real estate companies.

"HealthLease has a solid growth business model, but it would have required a lot of equity to get to the point to justify the $14.20 target price," National Bank Financial analyst Matt Kornack told Reuters.

In June, Health Care's rival Ventas Inc said it would buy American Realty Capital Healthcare Trust Inc for about $2.6 billion.

NorthStar Realty Finance Corp said earlier this month it would acquire Griffin-American Healthcare REIT II Inc for $3.35 billion.


Health Care said the deal would add to its portfolio more than 5,000 beds or units in North Carolina and Indiana in the United States and Alberta in Canada.

The company offered C$14.20 ($13) in cash for each HealthLease share, which represents a premium of 31 percent to HealthLease's Tuesday closing.

The deal is expected to close in the fourth quarter of 2014 and add 4 cents per share to Health Care's earnings in the first year after the transaction closes, the company said on Wednesday.

Health Care also said it was partnering with HealthLease's largest shareholder, Mainstreet Property Group, to acquire 17 projects managed by well-known operators under long-term lease agreements.

Health Care's shares were up 2.4 percent at $65.05 on the New York Stock Exchange in noon trading.

HealthLease's shares rose 31 percent to C$14.18 on the Toronto Stock Exchange, near the offer price.

Goldman Sachs & Co and RBC Capital Markets were Health Care's financial advisers for the deal, while BMO Capital Markets advised HealthLease.

Sidley Austin LLP, Borden Ladner Gervais LLP and Shumaker, Loop & Kendrick LLP were Health Care's legal advisers and Goodmans LLP advised HealthLease.

($1 = 1.09 Canadian dollar)

(Editing by Kirti Pandey)

By Anand Basu