The merger deal likely in trouble, Realty Income (O) sweetens its offer to include an immediate...

The merger deal likely in trouble, Realty Income (O) sweetens its offer to include an immediate cash payment to American Realty Capital (ARCT) investors of $0.35/share (2.9% of the stock price). Helping to fund the $55.5M payment are the Chairman and CEO of ARCT. Upon closing, Reality Income announces a dividend increase of $0.35/share, a near tripling of the expected post-merger bump. (PR)

Comments (6)
  • chopchop0
    , contributor
    Comments (5162) | Send Message
    As a recent buyer of O, can anyone comment how this will impact O going forward? From what I've read on SA, ARCT shareholders weren't too happy with this deal
    7 Jan 2013, 08:13 AM Reply Like
  • redlion500
    , contributor
    Comment (1) | Send Message
    As a longtime owner of O, I had looked forward to this deal closing, but the price was at the upper end of fair value. O's CEO has stated he would not chase ARCT if this offer was unsuccessful - now he's chasing it. I'm no longer in favor of the deal.
    7 Jan 2013, 08:26 AM Reply Like
  • Rhianni32
    , contributor
    Comments (2086) | Send Message
    Disclaimer: Long O
    ARCT shareholders werent happy because they weren't getting a good deal. This news has two parts
    1: They get a little bit more cash one time.
    2: We all get a higher then expected dividend in 2013 possibly to a concerning level. They spent 2012 working their FFO payout ratio under 90%
    7 Jan 2013, 09:12 AM Reply Like
  • smurf
    , contributor
    Comments (6175) | Send Message
    And, the problem is that many of those shareholders are big bloc ones.
    7 Jan 2013, 10:08 AM Reply Like
  • joereg4
    , contributor
    Comments (13) | Send Message
    The extra cash is coming from the CEO and Chairman of ARCT. They will make money from the performance of ARCT and will pass some of those funds to make their unhappy institutional investors happier. As for the higher dividend in O, ARTC has been doing well and will be very beneficial to O. It appears this new deal will cost O shareholders nothing more and in fact increase their yield.
    7 Jan 2013, 09:13 AM Reply Like
  • Marc Gordon
    , contributor
    Comments (578) | Send Message
    As an ARCT shareholder, I was against this merger because it substantially undervalued ARCT by around $1.50 . With the additional 35 cents per share I am still opposed to the merger, but it takes a little of the sting out of the deal.
    7 Jan 2013, 01:15 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs