MacKenzie Capital Management LP has launched an unsolicited tender offer to purchase up to 1 million shares of American Finance Trust Inc. common stock for $13.66 each, according to a filing with the Securities and Exchange Commission. The offer expires on March 22, 2018, unless extended.
The board of American Finance Trust, a publicly registered non-traded real estate investment trust sponsored by AR Global, is urging company shareholders to reject the offer.
In response to MacKenzie’s offer, the American Finance Trust board has authorized a self-tender offer “to deter MacKenzie and other potential future bidders that may try to exploit the illiquidity of shares and acquire them from stockholders at prices substantially below their NAV per share.”
American Finance Trust is offering to purchase up to 1 million shares for $14.35 each and recommends stockholders not sell their shares in either offer. The REIT’s offer expires on March 27, 2018.
American Finance Trust has an estimated net asset value of approximately $23.37 per share as of December 31, 2016. Shares were originally sold to investors for $25.00 each, prior to the close of the offering in October 2013.
This is a similar move made by another AR Global non-traded REIT, American Realty Capital New York City REIT, earlier this month when Tel Aviv-based investment fund Comrit Investments 1 LP offered to purchase 1.6 million shares for $14.68 each.
ARC NYC REIT countered with a $15.50 per share offer and increased the size to 1.9 million shares. In response, Comrit upped its offer price to $16.02 per share.
Hospitality Investors Trust, a non-traded REIT formerly known as American Realty Capital Hospitality Trust, also made a defensive self-tender offer late last year to deter MacKenzie from purchasing its shares.
American Finance Trust commenced its initial public offering in April 2013, which closed six months later after raising $1.6 billion in investor equity. In February 2017, the company completed its merger with affiliated non-traded REIT, American Realty Capital – Retail Centers of America, and now owns a portfolio of 517 properties with a total purchase price of $3.4 billion, according to Summit Investment Research.
MacKenzie Realty Capital launched in August 2013 and has raised $77 million in investor equity, as of December 2017. The company’s portfolio includes 61 investments totaling $73.2 million, according to Summit.