AR Global’s Retail Centers of America and American Finance Trust Postpone Merger Vote
American Realty Capital – Retail Centers of America and American Finance Trust, two publicly registered non-traded REITs sponsored by AR Global, have postponed their respective special stockholder meetings to February 13, 2017. At the meeting, which was originally scheduled for January 25th, shareholders will vote on the proposed merger that was announced in September.
The special meeting for both companies will be held at The Core Club, 66 East 55th Street in New York City. The Retail Centers of America meeting will begin at 3:00 p.m. EST, and the American Finance Trust meeting will commence at 4:00 p.m. EST.
As previously reported by The DI Wire, the two REITs are seeking to merge into a single retail-focused REIT with an enterprise value of approximately $3.9 billion. If approved by shareholders, the combined portfolio will total 494 properties, comprising 20.8 million rentable square feet of single-tenant net lease, power center, and lifestyle center assets.
American Finance Trust plans to acquire all of the outstanding common stock of Retail Centers of America for approximately $1.4 billion, payable in a combination of AFT common shares and cash plus the assumption of certain debt.
Under the terms of the agreement, RCA shareholders will receive 0.385 shares of AFIN common stock and $0.95 in cash for each share of RCA common stock they own. If approved, RCA shareholders will own approximately 37 percent of the combined company. The approximately 90 percent stock component of the transaction is expected to be tax-free to shareholders.
The RCA per share merger consideration has an estimated value of approximately $10.26 per RCA share, based on the exchange ratio and AFIN’s published estimated per share NAV as of December 31, 2015 of $24.17 and cash consideration of $0.95 per share. Shares of RCA were originally sold for $10.00 each, while shares of AFIN were originally sold for $25.00 each.
American Finance Trust will add two independent directors to be appointed by RCA’s board of directors, bringing to six the total number of directors for the combined company, five of which are independent.
American Finance Trust’s portfolio consists of 459 office, retail, and distribution properties totaling 13.1 million square feet with a total purchase price of $2.2 billion. The portfolio is 100 percent leased with a weighted-average remaining lease term of 9.6 years. The company commenced its initial public offering in April 2013, which closed six months later after raising $1.6 billion.
American Realty Capital—Retail Centers of America went effective in March 2011 and closed in September 2014 after raising $973 million in investor equity. The REIT’s portfolio includes 35 properties totaling 7.5 million square feet with an investment cost of $1.2 billion.
