Stockholders of American Realty Capital Properties and Cole Real Estate Investments have, at separate special meetings, approved the proposals related to the merger of Cole with a wholly owned subsidiary of ARCP.
ARCP and Cole expect to close the merger promptly, subject to customary closing conditions.
Assuming completion of the transaction valued at USD11.2bn, the combined company will create the world's largest net lease REIT with an enterprise value of USD21.5bn.
At ARCP's stockholder meeting, approximately 98.2 per cent of ARCP's shares voted were voted in favour of approving the issuance of ARCP common stock to the stockholders of Cole in connection with the merger, representing 58.8 per cent of all ARCP shares eligible to vote.
At Cole's stockholder meeting, approximately 94.9 per cent of Cole's shares voted were voted in favour of the merger, representing 65.2 per cent of all Cole shares eligible to vote.
The cash/stock election deadline with respect to the merger consideration to be received by Cole stockholders expired at 5:00 pm, New York time, on 22 January 2014. Approximately two per cent of the aggregate number of eligible Cole shares have elected to receive cash pursuant to the terms of the merger agreement, to be paid out at USD13.82 per Cole share. Therefore, the balance of approximately 98 per cent of eligible Cole shares will be converted into 1.0929 ARCP shares at the closing of the merger.
Nicholas S Schorsch, chairman and chief executive of ARCP, says: "We are thrilled that stockholders from both companies have voted overwhelmingly to approve the proposals related to the ARCP-Cole merger. This transaction creates the world's largest net lease REIT benefitting from a best-in-class property portfolio, an experienced management team and a strong, flexible balance sheet. Because of the two companies' shared disciplined investment philosophy and systematic investment evaluation process that looks closely at credit as well as real estate, we are positioned to provide durable income to our stockholders through growth in property rents and asset appreciation. We are also excited to welcome the Cole management team and their employees to the ARCP family."
Marc Nemer, Cole's chief executive officer, says: "We believe that this transaction provides the size, scale and operating efficiencies that will create superior growth opportunities and higher returns for our stockholders. ARCP continues to demonstrate its ability to grow its net lease business for the benefit of stockholders, and at the same time position the company as the undisputed leader in the net lease category, and one of the most successful REITs in the industry."
ARCP's annualised dividend will increase by USD0.06 from USD0.94 to USD1.00 per share in connection with the merger. As a result of the merger, ARCP will solidify its sector leadership among net lease REITs with a pro forma combined company portfolio of nearly 3,700 properties leased to over 1,100 tenants occupying over 100 million square feet in 49 states, the District of Columbia and Puerto Rico. More than 49 per cent of annualised rents will be generated from investment grade tenants. ARCP's portfolio will be 99 per cent occupied with an average remaining lease term of 10.5 years. The enterprise value will total more than USD21.5bn, 61 per cent greater than its next largest competitor.