REIT deal seen as boon for acquirer

REIT deal seen as boon for acquirer
Ladenburg reiterates its 'buy' rating price target on American Realty Capital Properties after its purchase of a related REIT.
JAN 15, 2013
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.

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