Schorsch Works to Create More Liquidity Through Tender

American Realty Capital Properties (NASDAQ: ARCP) recently announced that its wholly owned subsidiary, Desert Acquisitions, Inc. has extended its tender offer in regards to Cole Credit Property Trust Inc. (CCPT). It’s original offer to purchase all shares of CCPT for $7.25 per share, net to the seller in cash, with no interest, and subject to any withholding tax expired on April 25, 2014.

Only the date of expiration has changed; all other terms and conditions remain the same. The offer will now expire on May 16, 2014 at 5:00pm New York City time, unless it is extended further. The reason for the extension is that one of the conditions to the offer was not satisfied by the previously scheduled expiration date. The unsatisfied condition pertains to certain lender consents under mortgage loans secured by certain of CCPT’s properties.

CCPT is a public, non-listed REIT that invests primarily in single-tenant commercial properties that are net leased on a long-term basis to creditworthy tenants.

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.

CCPT’s valuation range of $6.33 to $7.72 was provided by Duff & Phelps, an independent valuation and corporate finance firm, using the NAV methodology. 

While Jack Ryngler, of the secondary market matching firm Pacific Partnership Group, initially considered the offering price per share to be somewhat low, he explains, “That seven dollar plus offer looks kind of good to a shareholder because it’s a premium to their most recent net asset value.”

Echoing Ryngler’s sentiment, on April 25, 2014, early results showed that approximately 6,364,125 shares of CCPT common stock had been tendered and not withdrawn, which represents about 63% of CCPT’s outstanding shares of common stock. 

As of December 31, 2013, CCPT owned 39 properties across 19 states totaling 956,000 square feet with an average remaining lease term of 7.4 years.