April 5 Diversified real estate investment trust Cole Credit Property Trust III rejected American Realty Capital Properties Inc's sweetened offer of $6.7 billion, saying it undervalued the company.
Late last month, American had raised its offer for Cole Credit to $12.50 per share in cash or $13.59 per share in stock from $12 per share in cash or stock.
Earlier this week, American raised the cash portion of its offer by up to 60 percent.
However, the increase in the cash portion of the offer would add about $3.8 billion of debt and result in "a highly levered company with an unstable capital structure," Cole Credit said in Friday's statement.
Cole Credit had rejected American Realty's earlier $5.7 billion offer, saying it would go ahead with its planned acquisition of external adviser 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.
American Realty's shares were down 1 percent at $14.68 on Friday on the Nasdaq.