American Realty Capital Properties said on Wednesday that it had offered to buy Cole Credit Property Trust III for $5.7 billion, in a deal that would create one of the biggest publicly traded real estate investment trusts.
On March 19, American Realty wrote to the board of Cole Credit Property, saying it would pay $12 a share in cash and stock. In the letter, American Realty urged Cole Credit Property to call off the proposed acquisition of its adviser, Cole Holdings. American Realty said its offer would “provide a higher level of consideration delivered sooner and with greater certainty.â€
American Realty indicated it had reached out to Cole Credit Property before the announcement of the deal with Cole Holdings, but had yet to receive a response.
The merger of American Realty and Cole Credit Property would create a real estate giant with 1,706 properties and over 400 tenants. Cole Credit Property Trust III invests in properties like pharmacies, home improvement stores and restaurants.
American Realty expects the deal to result in about $30 million in annual cost savings. The company also said it planned to increase its dividend to 93 cents a share once the transaction closed, which compared with Cole Credit’s current dividend of 65 cents a share.
