* ARCT shareholders to get $30/share in cash or 2.05 shares
* Deal expected to close in third quarter
* ARCP raises annualized dividend to $0.94/share from $0.91
By Sagarika Jaisinghani
July 2 American Realty Capital Properties Inc
(ARCP) said it would buy American Realty Capital Trust
IV (ARCT) for $3.1 billion as it seeks to become the
second-largest operator in the fast-growing U.S. net-lease
ARCT, a real estate investment trust sponsored by the same
group that manages ARCP, owns properties net-leased to single
tenants such as fast-food restaurants and convenience stores.
The net-lease industry has attracted investors as tenants
pick up most of the operating costs and the properties are
leased for long periods, performing like a high-dividend bond.
Cole Credit Property Trust II merged with Spirit Realty
Capital Inc in January. That deal also involved a public
company providing shareholders of a non-public REIT with the
ability to sell their shares.
ARCP has also sought a bigger share of the net-lease market,
which is led by Realty Income Corp. It bid twice for Cole
Credit Property Trust III Inc to become No.1 in the industry but
withdrew after being rejected.
The company then reached a deal to buy CapLease Inc
for $2.2 billion in May and bought more than 400 net-lease
properties from General Electric Co's financial arm in
ARCP said on Tuesday it would have an enterprise value of
$10 billion once all these deals were completed. It will also
own 2,579 single tenant properties across 48 U.S. states.
ARCP has been among the best performing REITs on a 12-month
trailing basis with a shareholder return of 58 percent, Chief
Executive Nicholas Schorsch said in a statement.
According to the terms of the deal, each ARCT shareholder
will either receive $30 in cash or 2.05 shares of ARCP's common
stock, valuing the offer at $30.34 per share based on ARCP's
Monday close of $14.80.
The acquisition is expected to close by the third quarter
ending September, ARCP said.
The company also raised its annualized dividend to 94 cents
per share from 91 cents.
ARCP's shares were down 0.5 percent at $14.73 in morning
trading on the Nasdaq. The Dow Jones Equity All-REIT
index was up 1 percent.