Net-lease REITs have been attracting investors as tenants pick up most of the operating costs and the properties are leased for long periods, performing like a high-dividend bond.
ARCP, which has been making deals to expand in the net lease sector, said the Cole acquisition would increase the size of its portfolio to 3,732 properties.
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Realty Income Corp., the current market leader had a portfolio of 3,013 properties as of December, according to regulatory filings.
American Realty said it would offer 1.0929 of its shares or $13.82 in cash for each Cole share.
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The stock offer is valued at $14.59 per Cole share, representing a premium of 14 percent to Cole's Tuesday close.
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Shares of both Cole and American Capital were unchanged before the bell.
ARCP said it had secured $2.75 billion in financing from Barclays for the deal, which is expected to close in the first half of 2014.
— By Reuters