American Realty offers $5.7B for REIT

Phoenix-based Cole Credit Property Trust III has an offer of $5.7 billion from American Realty Capital Properties, the Wall Street Journal reported.

The bid puts a value on the REIT’s share price of at least $12; its current valuation is $10 a share, according to securities filings cited by the Journal. If the deal is successful, Cole’s value would rocket in value to more than $9 billion, American Realty said.

Cole owns primarily retail, office and industrial properties leased to single tenants; American Realty owns commercial sites.

The offer could result in takeover battle, though, since Cole Credit announced two weeks ago that it was in talks to acquired Cole Holdings,bits property manager. American Realty released a letter Wednesday stating that its interest in “a potential acquisition” had beenbrevealed before Cole announced its proposed merger.

Nicholas Schorsch American Realty’s CEO added that his bid is better for the REIT than Cole’s own acquisition plan because it offers a premium of 20 percent over the current share price for a dividend increase of 15 percent.

“This will create a much larger and more diversified company,”Schorsch said. [WSJ] —Chrisotpher Cameron