AR Global’s American Finance Trust Urges Shareholders to Reject MacKenzie Tender Offer
The board of American Finance Trust Inc. (NASDAQ: AFIN), a former non-traded real estate investment trust sponsored by AR Global that recently listed half of its shares on the Nasdaq Global Select Market, is urging company stockholders to reject a recent unsolicited tender offer launched by MacKenzie Realty Capital.
The board of American Finance Trust Inc. (NASDAQ: AFIN), a former non-traded real estate investment trust sponsored by AR Global that recently listed half of its shares on the Nasdaq Global Select Market, is urging company stockholders to reject a recent unsolicited tender offer launched by MacKenzie Realty Capital Inc. to purchase up to 400,000 shares of each class of company common stock.
MacKenzie is offering $15.00 per Class A share, $11.27 per Class B-1 share, and $10.00 per Class B-2 share, and will purchase up to 400,000 shares of each class, or approximately 2.3 percent of the outstanding common shares. The offer expires on September 10, 2018.
Shares of the non-traded REIT originally sold for $25.00 each, and the company terminated its share repurchase program at the end of June prior to listing on Nasdaq.
“It is unfortunate that MacKenzie continues to use forms and materials which seem to be designed to mislead stockholders into believing they are issued by AFIN,” said the company in a statement. “Make no mistake, MacKenzie is not a charitable organization: they are a for-profit business that we believe opportunistically timed this offer just days after AFIN’s Class A common stock began trading on The Nasdaq Global Select market, prior to AFIN’s upcoming second quarter earnings release and before the trading market has been fully established.”
American Finance Trust’s listed Class A shares represent approximately 50 percent of the company’s outstanding shares of common stock. Class B-1 and Class B-2 shares represent approximately 25 percent each of the outstanding common stock and will automatically convert to Class A shares and list on Nasdaq no later than 90 days and 180 days, respectively, from April 19th. All shares will be fully listed before January 15, 2019.
The American Finance Trust board believes that MacKenzie’s tender offer is not in the best interest of stockholders. It claims that the offer price is “deceptive” since MacKenzie will reduce the price paid for tendered shares by any distributions paid after June 29, 2018. The company noted that the per share price paid by MacKenzie will be at least $0.29 less than their offer price if the offer expires on September 10, 2018.
The board also claims that because MacKenzie’s offer has not been publicly filed, it avoids certain investor protections and disclosure.
In other company news, Robert A. Stanger & Co issued a scathing special report criticizing the recent AFIN listing, calling it “a huge belly flop.”
AFIN stock closed at $14.95 on Wednesday.
While structured as a non-traded REIT, American Finance Trust’s offering raised more than $1.6 billion in investor equity between April and October 2013.
The company’s portfolio consists of 558 single-tenant net lease and multi-tenant retail and lifestyle center properties. According to Summit Investment Research, the properties have a combined investment cost of approximately $3.4 billion.
