NEW YORK, Dec. 12, 2012 /PRNewswire/ -- American
Realty Capital Trust, Inc., (NASDAQ: ARCT) ("ARCT" or the
"Company") today announced that it has filed an investor
presentation with the Securities and Exchange Commission ("SEC") in
connection with the Special Meeting of Stockholders scheduled for
January 16, 2013. At the
Special Meeting, ARCT stockholders of record as of December 6, 2012, will be entitled to
consider and vote on the proposal to approve the merger and the
other transactions contemplated by the merger agreement providing
for the acquisition of ARCT by Realty Income Corporation (NYSE:
O).
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As detailed in the Company's proxy materials, the ARCT board of
directors has concluded that the proposed merger with Realty Income
is in the best interests of the Company and its stockholders and
unanimously recommends ARCT stockholders vote FOR the proposal to
approve the merger.
The presentation is available on the SEC's website at
www.sec.gov and on the Company's website at http://ir.arctreit.com.
The presentation details the benefits ARCT stockholders will
receive as a result of the proposed merger with Realty
Income. Highlights include:
- Premium Valuation: Realty Income is valuing ARCT's
assets at a significantly higher price that represents an
exceptional cap rate that is lower than ARCT's cost basis.
This represents the lowest cap rate of similar net lease REIT
transactions.
- On September 5, 2012, the offer
value implied a weighted average capitalization rate for ARCT's
assets of 6.1% GAAP cap rate, or 5.9% based on current cash
rents. This is significantly below the weighted average
capitalization rate of 8.2% paid by ARCT for its assets as well as
the weighted average capitalization rates of similar transactions,
which range from 7.1% - 8.25%.
- In addition, the 15.7x forward EBITDA multiple represents the
second highest amongst similar REIT transactions.
- Ideal Strategic Buyer: Realty Income represents
the ideal strategic buyer given their business focus, size and
scale, investment grade balance sheet / cost of capital and share
liquidity. As part of Realty Income, ARCT stockholders will
benefit from:
- The strength and stability that comes from the scale and
diversity of the combined portfolio, in particular the $7 million reduction in overhead to service
ARCT's properties; and
- The value that is unlocked by the lower cost of capital and
risk reduction that comes from being able to better match the
maturity of the debt with the duration of the leases.
- Comprehensive Strategic Process: ARCT undertook a
comprehensive process to evaluate strategic alternatives to create
stockholder value, which concluded that the transaction with Realty
Income is superior to other available alternatives, including the
status quo. This evaluation began in April 2011.
Through this process, with the assistance of Goldman, Sachs &
Co., the Company's financial advisor, a number of strategic options
were evaluated thoroughly.
- Importantly, since announcement of the transaction, no third
party has approached ARCT or its advisors with an alternative
transaction or with a request for information despite low break fee
of approximately 1.7% of transaction value.
- Management's Interests Firmly Aligned with
Stockholders: Pro forma for the transaction, ARCT
management will own ~$45 million of
equity in Realty Income, including over $25
million of existing equity in ARCT.
- In addition, as part of the merger agreement, ARCT management
agreed to reduce its total compensation and capped its potential
financial upside.
- Future Growth Opportunities and Value Creation:
Realty Income's experienced management team has a successful track
record of driving dividend growth and producing enhanced
stockholder returns. The combined company will be
significantly larger and financially stronger than ARCT as a
stand-alone company or than its competitors, and will have one of
the lowest costs of capital in a sector where low cost capital
creates competitive advantage.
- The combined company's cost of capital advantage positions it
to grow earnings while increasing dividends.
- The combined company's greater scale and balance sheet strength
will facilitate the execution of large transactions through
improved access to capital, further enhancing the Company's ability
to realize value in the relatively fragmented net lease real estate
market.
- As a result of the merger, ARCT stockholders stand to benefit
from greater risk adjusted returns due to the enhanced stability
and diversity of the combined property portfolio.
ARCT urges all stockholders to vote FOR the Realty Income
transaction today. The vote of ARCT stockholders is
extremely important, no matter how many shares they own. The
affirmative vote of holders of a majority of ARCT's outstanding
shares is required to approve the merger and the other transactions
contemplated by the merger agreement.
Stockholders can vote FOR the proposal to approve the merger by
telephone, by Internet or by signing, dating and returning the
WHITE proxy card. If ARCT stockholders have any questions or
need assistance voting their shares, please call the Company's
proxy solicitor, D.F. King &
Co., Inc., toll free at 1‐800‐714‐3305.
About the Company
American Realty Capital Trust, Inc.,
a publicly traded Maryland
corporation listed on The NASDAQ Global Select Market under the
trading symbol "ARCT", is a leading self-administered real estate
company that owns and acquires single tenant free standing
commercial real estate properties that are primarily net leased on
a long-term basis to investment grade rated and other creditworthy
tenants. Additional information about the Company can be
found on the Company's website at www.arctreit.com.
Additional Information and Where to Find It
In
connection with the proposed merger, the Company and Realty have
filed a definitive proxy statement with the SEC on December 6,
2012 and commenced mailing the definitive proxy statement and a
form of proxy to the stockholders of the Company. BEFORE MAKING ANY
VOTING DECISION, INVESTORS ARE URGED TO READ THE DEFINITIVE PROXY
STATEMENT REGARDING THE PROPOSED MERGER CAREFULLY AND IN ITS
ENTIRETY BECAUSE THE PROXY STATEMENT CONTAINS IMPORTANT INFORMATION
ABOUT THE PROPOSED MERGER. Investors will be able to obtain,
without charge, a copy of the definitive proxy statement and other
relevant documents filed with the SEC from the SEC's website at
http://www.sec.gov. Copies of the documents filed by the Company
with the SEC are also available free of charge on the Company's
website at http://ir.arctreit.com, and copies of the documents
filed by Realty with the SEC are available free of charge on
Realty's website at http://www.realtyincome.com.
Participants in Solicitation
The Company, Realty and
their respective directors and executive officers may be deemed to
be participants in the solicitation of proxies from the Company's
and Realty's stockholders in respect of the proposed merger.
Information regarding the Company's directors and executive
officers can be found in the Company's definitive proxy statement
filed with the SEC on May 21, 2012.
Information regarding Realty's directors and executive officers can
be found in Realty's definitive proxy statement filed with the SEC
on March 30, 2012. Stockholders may
obtain additional information regarding the interests of the
Company and its directors and executive officers in the proposed
merger, which may be different than those of the Company's
stockholders generally, by reading the definitive proxy statement
filed in connection with the proposed merger with the SEC on
December 6, 2012 and other relevant documents regarding the
proposed merger filed with the SEC. These documents are available
free of charge on the SEC's website and from the Company or Realty,
as applicable, using the sources indicated above.
Forward-Looking Statements
Information set
forth herein (including information included or incorporated
by reference herein) contains "forward-looking statements" (as
defined in Section 21E of the Securities Exchange Act of 1934, as
amended), which reflect the Company's and Realty's expectations
regarding future events. The forward-looking statements involve a
number of risks, uncertainties and other factors that could cause
actual results to differ materially from those contained in the
forward-looking statements. Such forward-looking statements
include, but are not limited to whether and when the transactions
contemplated by the merger agreement will be consummated, the new
combined company's plans, market and other expectations,
objectives, intentions and other statements that are not historical
facts.
The following additional factors, among others, could cause
actual results to differ from those set forth in the
forward-looking statements: the ability to obtain regulatory
approvals for the transaction and the approval of the merger
agreement by the stockholders of both parties; unexpected costs or
unexpected liabilities that may arise from the transaction, whether
or not consummated; the inability to retain key personnel;
continuation or deterioration of current market conditions; future
regulatory or legislative actions that could adversely affect the
companies; and the business plans of the customers of the
respective parties. Additional factors that may affect future
results are contained in the Company's and Realty's filings with
the SEC, which are available at the SEC's website at www.sec.gov.
The Company and Realty disclaim any obligation to update and revise
statements contained in these materials based on new information or
otherwise.
SOURCE American Realty Capital Trust, Inc.