American Realty Capital Properties (ARCP) has entered into a merger agreement to acquire an affiliated real estate investment trust, American Realty Capital Trust IV (ARCT IV). The value of the transaction is $3.1 billion. The move comes as no surprise, and was telegraphed (to me at least) by ARCP's and ARCT IV's June purchase of a large portfolio of restaurant properties from GE Capital.
ARCP is offering 2.05 of its shares for each ARCT IV share, the equivalent of $30.34 per share based on ARCP's closing price of $14.80 yesterday, or cash of $30.00 per share, but ARCP has guaranteed ARCT IV investors that choose stock a floor of $30.62 per share. In conjunction with closing of the merger (and ARCP's closing of its previously announced acquisition of CapLease), ARCP is raising its distribution from $.91 per share to $.94 per share.
The transaction is expected to close by the end of the third quarter and is a full liquidity event for ARCT IV investors, so there is no share lock-up or tranched share release.
Update: Here is a Bloomberg article on merger,