REIT deal seen as boon for acquirer

Ladenburg reiterates 'buy' rating, price target on American Realty Capital Properties

Dec 18, 2012 @ 2:28 pm

By Bruce Kelly

American Realty Capital Properties Inc. Ticker:(ARCP) will benefit from its expected acquisition of a related real estate investment trust, American Realty Capital Trust III, according to one brokerage firm.

American Realty Capital Properties announced Monday that it will acquire American Realty Capital Trust III in a transaction expected to close in the second quarter of 2013.

“We reiterated our 'buy' rating” and $14 [per share] price target,” David Walrod, an analyst with Ladenburg Thalmann & Co. Inc., wrote in a report Tuesday. “We believe that the expected earnings increases, as well as the increased liquidity, lower cost structure and lower funding costs make [American Realty Capital Properties] an attractive investment opportunity.”

Shares of the REIT on Tuesday afternoon were trading at $12.82, up about 7 cents. Over the last 52 weeks, the REIT's stock has traded at between $9.77 and $13.48.

Each share of American Realty Capital Trust III will be converted into a right to receive either 0.95 share of American Realty Capital Properties, which would be the equivalent of $12.26 per share based on a closing price of $12.90 last Friday, or $12 in cash.

Both REITs have been focused on buying properties that have net leases, which designates the lessee or tenant as being responsible for the costs of leasing the asset as well as the rent. The two REITs on Monday said the combined company will have an enterprise value of $3 billion and will have a portfolio of more than 800 properties.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

CAIS's Brown: Big trends in wealth management

One of the biggest trends of 2017 was traditional institutional asset managers aiming their services at RIAs. How will this impact 2018? Matt Brown of CAIS explains.

Video Spotlight

Help Clients Be Prepared, Not Surprised

Sponsored by Prudential

Recommended Video

Path to growth

Latest news & opinion

Regulators showing renewed interest in cracking down on investment fees

SEC, Finra targeting high-fee share classes, 12b-1 fees and failure to give sales load discounts and waivers to investors.

Tax update: Brady says sales tax deduction in final bill

Taxpayers will be able to deduct state income taxes or state sales taxes in addition to property levies — up to a $10,000 cap.

Critics say regulation hasn't curbed overly rosy projections for indexed universal life insurance

They say rule didn't go far enough and more stringent measures may be necessary.

Broker, retirement groups make last-minute pleas to change tax legislation

Pass-through provisions are target of groups representing employee-model brokerage firms, as well as retirement plan advisers.

House and Senate reach tentative compromise for tax overhaul

Lawmakers still need to get a cost analysis of their agreement, so it's not yet definite, according to a source.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print