American Realty Capital Properties has reportedly offered to buy Cole Credit Property Trust Inc. for around $5.7 billion in an effort to create one of the largest public real estate investment trusts, which will focus on leasing space to single tenants (net-lease sector).
American Realty 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.
However, American Realty said that they would reconsider their offer of acquisition if Cole Credit's proposed deal of acquiring Cole Holdings, a real estate management firm, is finalized. Cole Credit had offered 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, reports Fox Business.
American Realty had sent a letter to Cole Credit asking them to call off the Cole Holdings acquisition plan. However, they were surprised to receive no response from them, reports NASDAQ.
American Realty asserted that their offer was better than Cole Holdings' acquisition proposal. If Cole Credit agrees to American Realty's bid, it can avail the advantage of turning into a public company as the latter is already listed on NASDAQ. Moreover, the bid would increase Cole's dividend 15 percent, offering a premium of 20 percent over its current share prices, reports Wall Street Journal.
"Our bid is fully banked. It's fully financed. We have the stock available. It's approved by our board. It's subject really only to a merger agreement and shareholder approval. It creates a real powerhouse in the REIT industry," Nicholas Schorsch, CEO and Chairman of American realty said in a statement.
"They're looking for a liquidity event, and we're looking for an acquisition. We've reached out to their advisers. We're hopeful for a positive response. In our minds, at this point there's no real adversarial position here," he added.
American Realty Capital is being advised by Barclays Plc on the transaction.
