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
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
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.