$12.50 and $13.59

The ink wasn't even dry on the press release announcing that Cole Credit Property Trust III (CCPT III) had rejected American Realty Capital Properties' (ARCP) latest $13.59 per share buyout offer when CCPT III proclaimed that it had completed the purchase of its sponsor, Cole Holdings.  Here is a Bloomberg article on the purchase.  The speed of the completion tells me the outcome was fait accompli - CCPT III was intent on buying its sponsor regardless of any outside offer, whether from ARCP or any other company.  CCPT III's Special Committee really was special - for Cole Holdings.

This morning, Chris Cole, 100% owner of Cole Holdings, is $20 million in cash richer.  He also pocketed 10,711,225 shares of CCPT III stock, and gets another 2,142,245 shares of CCPT III stock when CCPT III lists it shares.  At $10.00 per share, the price paid for their shares by CCPT III investors, this totals nearly $150 million.  (And don't forget all the additional compensation - including a $7.5 million upfront cash bonus as part Mr. Cole's new employment package,  a potential Subordinated Incentive Listing Fee (at a benevolent 25% discount) if the new Cole Real Estate Investments, Inc. trades above $10.45, and a future, potential "earn out" in 2017, all of which could push the price CCPT III paid for Cole Holdings much higher then $150 million.)  

If I have learned one thing over the years it's that the only thing a rich guy wants is more money.   When a rich guys feels entitled to a big payday and sees big wad of investor cash that can make a payday happen, the avarice is compounded.   

While Chris Cole's $20 million Friday is easy to determine and tangible, the outcome for investors this morning is less certain.  ARCP's last offer for CCPT III was either $12.50 per share in cash, or shares in ARCP with a value of $13.59 per share for CCPT III investors.   CCPT III's Special Committee rejected this offer as insufficient, among other reasons.  Cole, to date, has offered no price assurance to investors upon the listing of Cole Real Estate Investments.  It now has its lofty price points - $12.50 per share and $13.59 per share - and they are known by every investor, broker, broker / dealer and Cole competitor.