ARCP, ARCT IV Revise Merger Agreement

NEW YORK CITY-The merger between American Realty Capital Properties and American Realty Capital Trust IV will go forward under amended terms, the two companies announced Monday. Under terms of the amended agreement, ARCP will now acquire all of ARCT IV's outstanding stock in a transaction valued at $3 billion.

The deal calls for per-share consideration $9 in cash, 0.5190 shares of ARCP common stock and 0.5937 shares of ARCP perpetual preferred securities for a fixed nominal consideration, as of this past Friday, of $30.43. ARCP would be issuing 36.9 million shares of common stock and 42.2 million shares of perpetual preferred securities.

Further, ARCP will increase the dividend on its common shares to annualized dividend of 94 cents per share following the close of either the ARCT IV merger or that between ARCP and CapLease Inc., whichever occurs first. The perpetual preferred securities to be issued in connection with the ARCT IV merger will be senior in priority to ARCP's common stock, pay an annualized dividend of $1.675 per share, yield 6.7% on an annualized basis and be payable monthly. A spokesman for ARCP tells GlobeSt.com the revised agreement was met favorably by the market, and makes the deal more accretive while not changing its nominal value.

Changes to the merger agreement with ARCT IV were prompted by what ARCP terms “recent challenging conditions in the capital markets” that had a material effect on the economic terms of the original agreement. These changes, says Nicholas Schorsch, ARCP's chairman and CEO, will enable ARCP “to construct a transaction that continues to provide significant value to the ARCT IV stockholders, while at the same time giving the ARCP stockholders an attractive solution to a merger arrangement that had become increasingly challenged by the current economic environment.” He adds that the merger with ARCT IV “solidifies our leadership position in the net lease real estate sector.”

Schorsch, a heavy hitter in New York City CRE as well as nationally, will be among the industry leaders taking the stage for the "View from the Top" panel discussion at RealShare New York on Tuesday morning at the Metropolitan Club in Midtown Manhattan. For registration information, click here.

Subject to the completion of the ARCT IV and CapLease mergers, “we will have increased our enterprise value from $250 million in September 2011 to $10.2 billion by the end of 2013, becoming the second largest publicly-traded net lease REIT.  With this acquisition we continue to further diversify our asset and tenant base and increase our projected 2014 AFFO per share.” Both mergers are expected to close by year's end.