Cole Credit Properties Trust Inc has declined the $5.7 billion acquisition offer that American Realty Capital Properties had offered. The company has rejected the bid stating that the offer was not in the best interests of its shareholders and it would pursue buying Cole Holdings Corp.
American Realty had offered to buy 100 percent of Cole Credit's outstanding common shares for around $12 per share or 0.80 units of its own stock for each Cole Credit share. The total value of the deal including debt would amount to around $9 billion. It had also sent a letter to Cole Credit asking them to call off their plan to buy Cole Holdings for around $20 million, change its name to Cole Real Estate Investments and list it on the New York Stock Exchange.
According to Reuters, Cole Credit stated that a special Board committee had reviewed American Realty's offer carefully and concluded that the bid would not benefit its shareholders.
Cole Credit also wrote in a separate letter to its business partners that American Realty's offer was misleading and was not meant for 'serious consideration'. It also mentioned that the bid instead appeared to disrupt business for Cole Credit and Cole Holdings, both, reports Businessweek.
The company also said that it would be going forth with its plan of buying Cole Holdings Corporation. Buying Cole Holdings would not only create a new REIT fund, but would also enable the company to run on its own without being controlled by an external company.
In response to Cole Credit's rejection, American Realty said in a statement that it was not only surprised but also disappointed that the company had rejected the offer without trying to understand the offer completely. It also said that it still remained committed to the offer and was prepared to discuss the issue in detail with the company.
It is currently preparing an official response to Cole Credit's rejection letter, reports Bloomberg.