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American Realty Capital Properties And Cole Real Estate Investments Merge To Create World's Largest Net Lease REIT With Enterprise Value Of $21.5 Billion

Stocks in this article: ARCPCOLE

Terms of Merger Agreement Under the terms of the Merger Agreement, Cole will merge with and into a wholly owned subsidiary of ARCP. Cole stockholders may elect to receive 1.0929 shares of ARCP common stock (reflecting a fixed exchange ratio) or $13.82 cash for each share of Cole common stock. In the event elections for payment in cash exceed 20% of Cole's outstanding shares, such elections would be prorated. ARCP's offer is valued at $14.59 per Cole common share based on the fixed exchange ratio of 1.0929 and ARCP's closing price of $13.35 on October 22, 2013. The offer price represents a premium of 13.8% based on Cole's closing price on October 22, 2013 of $12.82. Shares of ARCP common stock issued to Cole stockholders are expected to be registered, fully tradable, listed on the NASDAQ and not subject to any "lockup." For U.S. federal income tax purposes, the transaction is intended to be tax free for Cole stockholders, except with respect to cash received. ARCP will increase its annualized dividend $0.06 to $1.00 per share upon the close of the merger.

Further, in connection with the closing of the merger, two of Cole's existing independent directors will become additional independent directors of ARCP, subject to approval by ARCP's current board.

Comments by Senior Management Commenting on the transaction, ARCP's Chairman and Chief Executive Officer, Nicholas S. Schorsch said, "Today it is my great pleasure to announce the merger of two leading U.S. real estate companies, American Realty Capital Properties and Cole Real Estate Investments. As a result, ARCP will become the largest net lease REIT and the new industry leader. We benefit by uniting not only two exceptional real estate portfolios, but also by joining forces with Cole's world-class management team. Going forward, we will benefit greatly from the executive leadership currently at Cole Real Estate Investments."

Mr. Schorsch continued, "Both companies share the same vision, namely to drive value for stockholders by placing their interests ahead of our own, aligning pay with performance, and reporting fully and transparently. We share the same disciplined investment philosophy and investment processes, which are focused on investment grade tenancy, long lease durations, a strong diversified tenant base, and a mix of property type and geography. ARCP and Cole both have histories of driving tremendous growth.  By leveraging our successful track records, our complementary businesses and highly skilled professionals, we are confident that we will be well-positioned to achieve continued growth. This merger represents a new beginning for former competitors, and we look forward to uniting two of the industry's most talented organizations. Far more can be accomplished by these two great companies working together than either one could have hoped to achieve independently."

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