Realty Income (O) to Pay American Realty (ARCT) Holders 35c/Share More in Amend Merger
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Realty Income Corporation, the Monthly Dividend Company, (NYSE: O) and American Realty Capital Trust, Inc., (Nasdaq: ARCT) announced that they have signed an amendment (the "Amendment") to the previously announced definitive merger agreement (the "Merger Agreement") between the two companies. Under the terms of the Merger Agreement, as amended by the Amendment, Realty Income will now pay ARCT stockholders a one-time cash payment of $0.35 per share in addition to the existing fixed exchange ratio of 0.2874 Realty Income shares for each share of ARCT common stock that they own. The additional cash consideration of $0.35 per share totals approximately $55.5 million in additional proceeds for the ARCT stockholders, of which approximately $52.5 million is being funded by Realty Income and $3.0 million by AR Capital LLC, including William M. Kahane, Chief Executive Officer, President and Director of ARCT, and Nicholas S. Schorsch, Chairman of the board of directors of ARCT.
Realty Income also announced that upon the closing of the transaction, its board of directors intends to increase the annualized dividend to Realty Income stockholders by approximately $0.35 per share, to an annualized rate of $2.17 per share beginning with the February 2013 distribution. This represents a $0.22 increase to the original dividend increase of $0.13 per share that Realty Income estimated when the transaction was initially announced. In addition, based on Realty Income's strong revenue and Adjusted Funds from Operations outlook for 2013, Realty Income announced that its board of directors intends to raise the annualized dividend by $0.10 per share in February 2013 even if the ARCT transaction does not close. The $0.35 per share estimated annualized dividend increase expected after the close of the merger with ARCT includes this $0.10 per share increase.
Realty Income and ARCT have confirmed that if ARCT stockholders do not approve the merger on its revised terms, then the Merger Agreement will be terminated, and if Realty Income obtains its stockholder approval, Realty Income will receive $4.0 million in expense reimbursement from ARCT. As disclosed in ARCT's January 2, 2013 press release, the ARCT management team will continue to operate and grow ARCT consistent with its established operating, investment and capitalization strategies, should the Merger Agreement be terminated.
All other terms and conditions remain the same as those set out in the Merger Agreement as described in detail in the definitive proxy mailed to Realty Income and ARCT stockholders on December 6, 2012 and available on www.sec.gov. The transaction is expected to close in January 2013, following a vote by the stockholders of both companies on January 16, 2013.
The Special Meeting of Realty Income stockholders to consider and vote on the proposal to approve the issuance of shares of Realty Income common stock in connection with the acquisition, is scheduled for January 16, 2013. Realty Income stockholders of record as of December 6, 2012 will be entitled to vote on the proposal.
The Special Meeting of ARCT stockholders to consider and vote upon a proposal to approve the merger with Realty Income and the other transactions contemplated by the Merger Agreement providing for the acquisition of ARCT by Realty Income is scheduled for January 16, 2013. ARCT stockholders of record as of December 6, 2012 will be entitled to vote at the Special Meeting.
Realty Income and ARCT expect to file additional supplemental materials regarding the Amendment with the Securities and Exchange Commission soon and stockholders are urged to review these materials when available.
Realty Income also announced that upon the closing of the transaction, its board of directors intends to increase the annualized dividend to Realty Income stockholders by approximately $0.35 per share, to an annualized rate of $2.17 per share beginning with the February 2013 distribution. This represents a $0.22 increase to the original dividend increase of $0.13 per share that Realty Income estimated when the transaction was initially announced. In addition, based on Realty Income's strong revenue and Adjusted Funds from Operations outlook for 2013, Realty Income announced that its board of directors intends to raise the annualized dividend by $0.10 per share in February 2013 even if the ARCT transaction does not close. The $0.35 per share estimated annualized dividend increase expected after the close of the merger with ARCT includes this $0.10 per share increase.
Realty Income and ARCT have confirmed that if ARCT stockholders do not approve the merger on its revised terms, then the Merger Agreement will be terminated, and if Realty Income obtains its stockholder approval, Realty Income will receive $4.0 million in expense reimbursement from ARCT. As disclosed in ARCT's January 2, 2013 press release, the ARCT management team will continue to operate and grow ARCT consistent with its established operating, investment and capitalization strategies, should the Merger Agreement be terminated.
All other terms and conditions remain the same as those set out in the Merger Agreement as described in detail in the definitive proxy mailed to Realty Income and ARCT stockholders on December 6, 2012 and available on www.sec.gov. The transaction is expected to close in January 2013, following a vote by the stockholders of both companies on January 16, 2013.
The Special Meeting of Realty Income stockholders to consider and vote on the proposal to approve the issuance of shares of Realty Income common stock in connection with the acquisition, is scheduled for January 16, 2013. Realty Income stockholders of record as of December 6, 2012 will be entitled to vote on the proposal.
The Special Meeting of ARCT stockholders to consider and vote upon a proposal to approve the merger with Realty Income and the other transactions contemplated by the Merger Agreement providing for the acquisition of ARCT by Realty Income is scheduled for January 16, 2013. ARCT stockholders of record as of December 6, 2012 will be entitled to vote at the Special Meeting.
Realty Income and ARCT expect to file additional supplemental materials regarding the Amendment with the Securities and Exchange Commission soon and stockholders are urged to review these materials when available.
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