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ARCP increases Cole Credit bid

by Demitri Diakantonis  |  Published March 28, 2013 at 9:24 AM
New York REIT American Realty Capital Properties Inc. on Wednesday, March 27, increased its bid for rival Cole Credit Property Trust III Inc. to $9.7 billion, including debt.

ARCP is now offering to pay either $13.59 per share in stock or $12.50 per share in cash, valuing Cole at around $6.7 billion.

ARCP said it increased its offer because Cole disclosed additional financial information on Monday. The target projects an estimated $25 million to $33 million in pro forma Ebitda from its pending plan to merge with its external adviser Cole Holdings Inc., ARCP said.

ARCP has proposed to acquire both companies and merge them.

On March 19, ARCP offered to buy Cole for $12 per share in cash and stock, valuing the target at $5.7 billion, or $9 billion including debt.

Phoenix-based Cole rejected the bid a couple of days later, saying it will instead follow its current plan to merge with Cole Holdings and seek a public listing soon after. ARCP said it preferred to have kept its bid private, but Cole left ARCP no choice to go public.

"We continue to believe that at this point negotiating in a public forum, although not our preference, is the only path available to us due to your refusal to engage with us privately in a productive manner," ARCP said Wednesday.

The proposed merger would make ARCP the largest publicly traded REIT in the net lease sector with more than 1,700 properties and about 400 tenants.

Barclays plc and Realty Capital Securities LLC are advising ARCP, which is being represented by Proskauer Rose LLP along with Weil, Gotshal & Manges LLP.

Goldman, Sachs & Co., Lazard and Wachtell, Lipton, Rosen & Katz and Venable LLP advised the special committee to Cole's board. Morris, Manning & Martin LLP represented Cole.

ARCP shares traded 1.5% higher, to $14.52, on Wednesday afternoon, giving it a market capitalization of about $2.2 billion.

Neither ARCP nor Cole returned calls Wednesday.
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Tags: American Realty Capital Properties | Barclays | Cole Credit Property Trust III | Goldman Sachs | Lazard | Proskauer Rose LLP | REIT | Wachtell Lipton Rosen & Katz | Weil Gotshal & Manges

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Demitri Diakantonis

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