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Acquisition Of CapLease, Inc. By American Realty Capital Properties, Inc. May Not Be In The Best Interests Of CapLease Shareholders

Stocks in this article: ARCP LSE

SAN DIEGO and NEW YORK, May 29, 2013 /PRNewswire/ -- Shareholder rights attorneys at Robbins Arroyo LLP are investigating the acquisition of CapLease, Inc. (NYSE: LSE) by American Realty Capital Properties, Inc. (NASDAQ: ARCP).  On May 28, 2013, the companies announced the signing of a definitive merger agreement under which American Realty will acquire CapLease for $8.50 per share of common stock in cash. 


The Board of Directors' Actions May Prevent CapLease Shareholders from Receiving Maximum Value for Their Stock

Robbins Arroyo LLP's investigation focuses on whether the board of directors at CapLease is undertaking a fair process to obtain maximum value and adequately compensate its shareholders in the merger.

On May 28, 2013, the companies announced the signing of a definitive merger agreement under which American Realty will acquire CapLease for $8.50 per share of common stock in cash.  The $8.50 merger consideration is significantly below the target price of $9.00 set by an analyst at Sidoti & Company LLC.

Is the Acquisition Best for CapLease and Its Shareholders?

On May 8, 2013, CapLease released its financial results for the quarter ended March 31, 2013, reflecting an increase in total revenues and rental revenue.  Specifically, total revenues increased 11% year-over-year to $43.3 million and rental revenue increased 7% year-over-year to $35.2 million.  Further, the company's common stock dividend has increased 19% since the second quarter of 2012, representing the third consecutive quarter of a dividend increase.

In announcing the results, Paul McDowell, CapLease Chairman and Chief Executive Officer, commented, "We have had a strong start to 2013, highlighted by solid FFO results, over $90 million of pending property acquisitions, continued growth in our market capitalization which now exceeds $600 million, and our third consecutive quarter of raising the common stock dividend. We have a large and growing pipeline of potential acquisitions and remain optimistic about the prospects for our business and our ability to grow the portfolio significantly for the year."

Given these facts, the firm is examining the board of directors' decision to sell CapLease now rather than allow shareholders to continue to participate in the company's continued success and future growth prospects.   

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