American Realty Capital Properties (Nasdaq: ARCP) announced today that through a wholly owned subsidiary, Desert Acquisitions, Inc., it has made an offer to purchase all shares of Cole Credit Property Trust Inc. (CCPT) for $7.25 per share, net to the seller in cash, with no interest, and subject to any withholding tax. CCPT’s board of directors has recommended that its stockholders tender their shares in response to the offer.
The offer will expire at midnight on April 25, 2014.
The offer also is subject to a number of conditions such as certain third-party consents and a legal opinion by CCPT’s counsel in regards to the company’s REIT status. The agreement also includes certain termination rights for both CCPT and ARCP.
CCPT is a public, non-listed REIT that invests primarily in single-tenant commercial properties that are net leased to creditworthy tenants, long-term. As of December 31, 2013, the REIT owned 39 properties across 19 states totaling 956,000 square feet with an average remaining lease term of 7.4 years.
Launched in April of 2004, CCPT offered shares of common stock at a price of $10 per share. By September of 2005, the REIT had closed its initial public offering after it raised over $100 million.
As of March 26, 2014, CCPT had 10,090,951 shares outstanding held by 1,485 stockholders of record according to DST Systems, Inc., the REITs registrar and transfer agent.
Duff & Phelps, an independent valuation and corporate finance firm, provided CCPT’s board of directors a valuation range of $6.33 to $7.72 per share using the NAV methodology. As of December 31, 2013, the board determined that $6.55 per share was an appropriate estimated valuation and it was correct to use the NAV method.
“Our board of directors determined that the NAV methodology was the most appropriate valuation methodology based on the size of our portfolio, as it may be more likely that a potential liquidity transaction would occur through individual or portfolio asset sales rather than through a listing of our shares on a national securities exchange or other significant sale of our equity securities,” according to a filing.