UPDATE 2-American Realty raises its offer for Cole Credit

Wed Mar 27, 2013 11:00am EDT

* Raises offer to $13.59 per share in stock from $12

* Deal values company at $6.7 bln, vs $5.7 bln earlier

March 27 (Reuters) - Diversified real estate investment trust American Realty Capital Properties Inc raised its bid for Cole Credit Property Trust III to $6.7 billion, a week after its original offer was rejected.

American Realty increased its offer to $12.50 per share in cash or $13.59 per share in stock from $12 per share in either cash or stock, and said the revised figure takes into account Cole Credit's planned acquisition of its external adviser.

Cole Credit had rejected American Realty's earlier $5.7 billion offer, saying it would go ahead with its planned acquisition of Cole Credit Holdings Inc and try to get listed on the New York Stock Exchange.

The deal would make American Realty the largest publicly traded REIT in the net-lease sector. Net-leased properties have become very popular among investors in the current low-interest environment.

Such properties resemble a bond, but with a higher dividend, as the tenants pick up most of the operating costs associated with the properties, which are leased for long periods.

The net lease sector has been consolidating. Cole Credit Property Trust II merged with Spirit Realty Capital Inc in January. The deal too involved a public company providing shareholders of a non-public REIT with the ability to sell their shares.

Cole Credit Property Trust III owns 926 properties with a combined area of nearly 40 million square feet in 47 states and counts Walgreen Co and CVS Caremark Corp among its tenants.

American Realty Capital has 1,706 properties, or about 60 million square feet. Its top 10 tenants include Dollar General, Citizens Bank, FedEx Corp and Walgreen.

American Realty's shares were trading flat at $14.31 on Wednesday morning on the Nasdaq.

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