American Realty Capital Properties (ARCP) agrees to buy Cole Real Estate investments (COLE) in a deal valued at $11.2B. The board's of each company have approved the deal and ARCP has already secured $2.75B in financing. Combined, the companies will have an enterprise value of $21.5B.
Cole, of course, recently came public after fending off a takeover bid from ARCP when it was a non-traded REIT.
Cole owners will have the option of receiving 1.0929 shares of ARCP stock for each share they own, or $13.82 per share in cash. The stock offer is valued at $14.59 per share based on last night's ARCP close of $13.35. Cole last night closed at $12.82, so the offer is a 13.8% premium. The transaction is expected to close in 2014 Q1.
ARCP 2014 FFO per share guidance is hiked to $1.13-$1.19 in lieu of the merger. Also among post-merger benefits: The annual dividend will be $1.00 (vs. $0.96 now), $70M of expense synergies, increased institutional coverage and possible inclusion in the S&P 500.
COLE +2% to $13.08 premarket.