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American Realty Capital Properties And Cole Real Estate Investments Announce Preliminary Results Of Merger Consideration Election

Stocks in this article: ARCP COLE

NEW YORK and PHOENIX, Jan. 23, 2014 /PRNewswire/ --  American Realty Capital Properties, Inc. ("ARCP") (NASDAQ: ARCP) and Cole Real Estate Investments, Inc. ("Cole") (NYSE: COLE) today announced the preliminary results of the elections made by Cole stockholders regarding the form of merger consideration to be received in connection with ARCP's proposed acquisition of Cole.

(Logo: http://photos.prnewswire.com/prnh/20120529/NY15147LOGO ) (Logo: http://photos.prnewswire.com/prnh/20131023/NY02683LOGO-a )

As previously announced, on October 22, 2013, ARCP and Cole entered into a definitive merger agreement under which Cole will merge with and into a wholly owned subsidiary of ARCP in a transaction that would create the world's largest net-lease REIT with a combined enterprise value of $21.5 billion.  Pursuant to the terms of the definitive merger agreement, Cole stockholders could elect to receive 1.0929 shares of ARCP common stock (reflecting a fixed exchange ratio) (the "stock election") or $13.82 in cash for each share of Cole common stock they hold, subject to proration as set forth in the definitive merger agreement (pursuant to the requirement that cash consideration not be paid with respect to more than 20% of the shares of Cole common stock issued and outstanding immediately prior to closing) (the "cash election").  A holder of Cole restricted share units ("RSUs") or performance share units ("PSUs") could make either a stock election or a cash election for all (but not less than all) of the shares of Cole common stock held by such holder (including shares of Cole common stock that will be deemed issued in respect of such RSUs and/or PSUs pursuant to the definitive merger agreement). 

The election deadline was 5:00 p.m., New York time, on January 22, 2014 (the "Election Deadline").  As of January 22, 2014, there were approximately 476,626,612 shares of Cole common stock outstanding and RSUs and PSUs. Based on available information as of the Election Deadline, the preliminary election results with respect to stock elections and cash elections were as follows:

  • holders of approximately 10.7 million Cole shares (including holders of RSUs and PSUs), or approximately 2% of the Cole shares outstanding and RSUs/PSUs, elected to receive cash;
  • holders of approximately 255.9 million Cole shares (including holders of RSUs and PSUs), or approximately 54% of the Cole shares outstanding and RSUs/PSUs, elected to receive shares of ARCP common stock; and
  • holders of approximately 210.0 million Cole shares (including holders of RSUs and PSUs), or approximately 44% of the Cole shares outstanding and RSUs/PSUs, did not make a valid election or did not deliver a valid election form prior to the election deadline.   

Since Cole stockholders who did not make a valid election or did not deliver a valid election form prior to the election deadline are, pursuant to the definitive merger agreement, deemed to have made a stock election, in total holders of approximately 465.9 million Cole shares (including holders of RSUs and PSUs), or approximately 98% of the Cole shares outstanding and RSUs/PSUs, have made a stock election or are deemed to have made a stock election.  Cole stockholders who made valid cash elections may be prorated and receive a combination of cash and shares of ARCP common stock for their shares of Cole common stock, as set forth in the definitive merger agreement.  No fractional shares of ARCP common stock will be issued, and Cole stockholders will receive cash in lieu of fractional shares at the closing price of shares of ARCP common stock on the closing date of the merger.  As indicated in the election form sent to Cole stockholders, Cole stockholders who made (and did not revoke) valid elections may not sell or otherwise transfer the Cole shares subject to such election before the proposed merger is completed (unless the merger agreement is terminated).   

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