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ANN ARBOR, MI-The controversial merger between Captec Net Lease Realty Inc. and Commercial Net Lease Realty Inc. of Orlando, FL has been approved by stockholders. Captec says CNLR will acquire all of Captec’s outstanding shares for $124 million, basedon a value of $13.05 per share of Captec common stock, during the fourth quarter of 2001.

As a result of this merger, CNLR will have a portfolio of more than 377properties in 40 states.

“We are extremely pleased with the strong support from stockholders who clearly agree that a merger will provide growth opportunities and near and long-term value,” says Patrick Beach, chairman, president and CEO of Captec.

One stockholder had tried to rally others to reject the merger. Phillip Goldstein, portfolio manager of Opportunity Partners L.P. of New York, owns more than 369,000 Captec shares. Goldstein had said Beach has been giving out misinformation and is pocketing money on the deal, while also neglecting his duties.

“I hope this letter finds you comfortably settled in your Santa Barbara mansion. No more cold Michigan winters for you,” Goldstein said snidely in an Oct. 31 letter addressed to Beach.

Beach and his firm shot back press releases claiming Goldstein is an amateur stockholder dissident who has no experience in running or selling a public company.

Two weeks before the vote, Institutional Shareholder Services, a proxy advisory firm, recommended that Captec stockholders vote in favor of the company’s proposed merger.

According to Captec, the ISS said in a Nov. 2 report that it “believes that the board took the necessary steps in conducting a thorough and fair process to sell Captec, including its non-real estate assets. Furthermore, the CNLR merge appears to be a sound transaction for shareholders and maximizes shareholder value. The merger warrants shareholder support.”

Goldstein had said instead of the merger, the company should consider either liquidation or a restructured merger with CNLR or another company, but with the excluded assets being placed in a liquidating trust. Goldstein would not return phone calls on whether he will try to have the deal rejected.

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