Proxy Advisory Firms Recommend Affirmative Vote for Global Net Lease/ARC Global Trust II Merger
Global Net Lease Inc. (NYSE: GNL), a publicly traded real estate investment trust, declared that a number of independent proxy advisory firms have recommended that GNL shareholders vote for the proposed merger with non-traded REIT American Realty Capital Global Trust II Inc.
As previously reported by The DI Wire, the two companies plan to merge into a single-tenant net lease REIT which will have a pro forma enterprise value of $3.3 billion and will own a combined 345 properties in 7 countries. If approved, it will retain the Global Net Lease name, trade on the New York Stock Exchange under the ticker symbol “GNL,” and continue to be led by GNL’s current management team.
Institutional Shareholder Services is an independent U.S. proxy advisory firm and its voting analyses and recommendations are relied upon by institutional investment funds, mutual funds, and fiduciaries throughout the country.
In recommending that GNL shareholders vote “FOR” the proposed merger, ISS stated in its December 7, 2016 report, “The combined company is expected to become a premier global net lease real estate investment trust, with an expected enterprise value of approximately $3.3 billion; and realize $5.7 million of ongoing annual savings, including $1.6 million in contractual asset management fee savings and $4.1 million in general and administrative savings.”
U.S. proxy advisory firm Glass, Lewis & Co. also recommended that GNL shareholders vote “FOR” the proposed merger.
Glass Lewis, in its report dated December 12, 2016, commented, “On balance, we believe that the proposed merger is based on sound strategic rationale. Further, based on the findings from UBS’ fairness opinion, we believe that that the merger exchange ratio is financially fair and reasonable to the company.”
Egan-Jones Proxy Services also recommended shareholders vote “FOR” the proposed merger.
The acquisition of Global II includes a fixed exchange ratio of 2.27 GNL shares for each share of Global II common stock owned. Global II shareholders originally paid $25.00 per share of common stock.
The combined company will have a 5-member board of directors, four of whom will be independent. Of these, one will be a newly appointed independent director initially designated by Global II.
The companies previously noted that the strategic and financial benefits of the merger include enhanced size and scale, improved portfolio metrics, tenant diversification, and reduced fees. The transaction, if approved by shareholders, is expected to close during the fourth quarter of 2016.
Global Net Lease shares closed at $7.91 per share on Monday.
