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REIT Rejects Unsolicited Bid

MAR 21, 2013 4:19pm ET
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Cole Credit Property Trust III Inc., Phoenix, has rejected an unsolicited takeover bid from American Realty Capital Properties, stating it will maintain its plans to acquire Cole Holdings Corp., a related real estate investment asset management firm.

ARCP was offering $5.7 billion or $12 per share for CCPT III in an effort to bust up the Cole Holdings transaction. In a letter to the CCPT board, ARCP said if the internalization transaction was completed, it would have to reconsider the proposal and reduce the amount it was willing to pay.

ARCP said its offer gives CCPT III shareholders immediate liquidity and it would create “largest, highest quality publicly traded REIT in the net lease sector.” While both companies are publicly traded, ARCP is listed on Nasdaq, while CCPT III currently is a non-listed company.

If the deal with Cole Holdings were to go through, the combination would change its name to Cole Real Estate Investments Inc. and seek a listing on the New York Stock Exchange.

In a press release, CCPT III said the special committee of its board has reviewed the ARCP offer and the deal is not in the best interests of CCPT III and its stockholders.

ARCP responded by saying it was "not only surprised, but disappointed," by the rejection and that CCPT III is depriving its stockholders of a choice. It added it remains committed to its offer.

Another REIT dealing with an unsolicited takeover offer, CommonWealth REIT, said it has won a ruling from a Maryland judge against Corvex Management LP and Related Fund Management LLC, which had been seeking a stay from arbitration proceedings that the REIT had initiated to remove their lawsuit from the court system.

Corvex and Related had sought to stop a since-priced 30 million share common stock offering by proposing to pay $27 per share for CommonWealth. CommonWealth has filed with the Securities and Exchange Commission preliminary consent revocation materials.

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