American Realty Capital offers to buy Cole Credit in cash-and-stock deal valued at $5.74B

NEW YORK, N.Y. – American Realty Capital made a $5.74 billion cash-and-stock bid for Cole Credit Property Trust III on Wednesday after saying that it had not heard back from the fellow real estate investment fund about an earlier buyout offer.

American said that it was surprised there was no response when, earlier this month, Cole announced that it was acquiring external adviser Cole Holdings Corp. for $20 million in cash and approximately 10.7 million in stock.

The company said it hopes that constructive talks can be held and that Cole Credit will contact it promptly. But American Realty said that it is “prepared to consider all alternatives to complete this transaction.”

The offices of Cole Credit Property in Arizona were not open at the time the offer was announced and officials there could not be reached for comment.

American Realty says the offer, which it values at $9 billion including debt, is a better deal for Cole, and that it would create the biggest publicly traded REIT in the net lease sector.

Right now, American Realty said that it will pay at least $12 per share for Cole Credit’s stock. Cole Credit has 478 million outstanding shares. Cole Credit stockholders could choose cash or 0.80 shares of American Realty for each share they own.

It said, however, that it would reconsider its bid and possibly decrease the offer if Cole Credit goes through with plans to buy Cole Holdings.

American Realty, which invests mostly in retail and office properties, said it would fund the cash portion of the deal with cash on hand and borrowings under its existing credit line. It anticipates that the deal would result in annual general and administrative savings of at least $30 million.

Shares of American Realty Capital Properties Inc. gained 14 cents to $14.07 in premarket trading.