United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report: January 7, 2013
REALTY INCOME CORPORATION
(Exact name of registrant as specified in its charter)
| Maryland | 1-13374 | 33-0580106 | ||
|
(State or Other Jurisdiction of Incorporation or Organization) |
(Commission File Number) |
(IRS Employer Identification No.) |
600 La Terraza Boulevard,
Escondido, California 92025-3873
(Address of principal executive offices)
(760) 741-2111
(Registrant’s telephone number, including area code)
N/A
(former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| x | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| x | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 Entry Into a Material Definitive Agreement.
On January 6, 2013, Realty Income Corporation, a Maryland corporation (the “Company”), entered into an amendment (the “Amendment”) to that certain Agreement and Plan of Merger, dated as of September 6, 2012 (the “Merger Agreement”), with Tau Acquisition LLC, a Delaware limited liability company and wholly owned subsidiary of the Company (“Merger Sub”), and American Realty Capital Trust, Inc., a Maryland corporation (“ARCT”), pursuant to which ARCT would merge with and into Merger Sub (the “Merger”). The Amendment adds a cash portion to the merger consideration such that, upon the Merger, each outstanding share of common stock, par value $0.01 per share, of ARCT will be converted into the right to receive 0.2874 shares of common stock, par value $0.01 per share, of the Company plus $0.35 per share in cash. Other than amendments to the Merger Agreement related to the addition of the cash portion of the merger consideration, the Company and ARCT did not amend the Merger Agreement in any other respect.
In connection with the Amendment, AR Capital, LLC (“ARC”) and Nicholas S. Schorsch, the Chairman of the Board of Directors of ARCT (“Schorsch”), agreed to contribute $3,000,000 towards the increase in the merger consideration described above. Accordingly, concurrently with the execution of the Amendment, the Company entered into an amendment to that certain side letter agreement dated as of September 6, 2012 (the “Side Letter”), with Schorsch and ARC, which amendment lowered the threshold on transaction expenses of ARCT for which Schorsch and ARC would be required to reimburse the Company.
A copy of the Amendment is attached hereto as Exhibit 2.1 and a copy of the amendment to the Side Letter is attached hereto as Exhibit 99.1. The foregoing descriptions of the Amendment and the amendment to the Side Letter do not purport to be complete and are qualified in their entirety by reference to the full text of such amendments. For further information see the joint press release dated January 7, 2013 included as exhibit 99.2 hereto.
Additional Information and Where to Find It
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. In connection with the proposed transaction, the Company and ARCT has filed with the Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4 containing a joint proxy statement/prospectus and other documents regarding the proposed transaction, and will file supplemental materials with the SEC. The joint proxy statement/prospectus contains important information about the proposed transaction and related matters. STOCKHOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC CAREFULLY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, ARCT AND THE PROPOSED TRANSACTION.
Investors and security holders of the Company may obtain free copies of the registration statement, the joint proxy statement/prospectus and other relevant documents filed by the Company and ARCT with the SEC through the website maintained by the SEC at www.sec.gov. Copies of the documents filed by the Company with the SEC are also available on the Company’s website at www.realtyincome.com, and copies of the documents filed by ARCT with the SEC are available on ARCT’s website at www.ir.arctreit.com.
The Company, ARCT and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the Company’s and ARCT’s stockholders in respect of the proposed transaction. Information regarding the Company’s directors and executive officers can be found in the Company’s definitive proxy statement filed with the SEC on March 30, 2012. Information regarding ARCT’s directors and executive officers can be found in ARCT’s definitive proxy statement filed with the SEC on May 21, 2012. Additional information regarding the interests of such potential participants is included in the joint proxy statement/prospectus and other relevant documents filed with the SEC in connection with the proposed transaction. These documents are available on the SEC’s website and from the Company or ARCT, as applicable, using the sources indicated above.
Forward Looking Statements
Information set forth in this Current Report on Form 8-K (including information included or incorporated by reference herein) contains “forward-looking statements” (as defined in Section 21E of the Securities Exchange Act of 1934, as amended), which reflect the Company’s and ARCT’s expectations regarding future events. The forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those contained in the forward-looking statements. Such forward-looking statements include, but are not limited to whether and when the transactions contemplated by the Merger Agreement will be consummated, the new combined company’s plans, market and other expectations, objectives, intentions and other statements that are not historical facts.
The following additional factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: the ability to obtain regulatory approvals for the transaction and the approval of the Merger Agreement by the stockholders of both parties; unexpected costs or unexpected liabilities that may arise from the transaction, whether or not consummated; the inability to retain key personnel; continuation or deterioration of current market conditions; future regulatory or legislative actions that could adversely affect the companies; and the business plans of the customers of the respective parties. Additional factors that may affect future results are contained in the Company’s and ARCT’s filings with the SEC, which are available at the SEC’s website at www.sec.gov. The Company and ARCT disclaim any obligation to update and revise statements contained in these materials based on new information or otherwise.
Item 9.01 Financial Statements and Exhibits.
| (d) | Exhibits. |
|
Exhibit
|
Description |
|
| 2.1 | Amendment dated as of January 6, 2013 to the Agreement and Plan of Merger, dated as of September 6, 2012, by and among Realty Income Corporation, Tau Acquisition LLC and American Realty Capital Trust, Inc. | |
| 99.1 | Amendment dated as of January 6, 2013 to the Side Letter, dated as of September 6, 2012, by and among Realty Income Corporation, AR Capital, LLC and Nicholas S. Schorsch. | |
| 99.2 | Joint Press Release issued by Realty Income Corporation and American Realty Capital Trust, Inc. on January 7, 2013. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| REALTY INCOME CORPORATION | ||||
| Date: January 7, 2013 | By: |
/s/ Gary M. Malino |
||
| Gary M. Malino | ||||
| President and Chief Operating Officer | ||||
Exhibit 2.1
F IRST A MENDMENT T O A GREEMENT AND P LAN OF M ERGER
This F IRST A MENDMENT TO A GREEMENT AND P LAN OF M ERGER (this “ Amendment ”), dated as of January 6, 2013 is entered into by and among Realty Income Corporation, a Maryland corporation (“ Parent ”), Tau Acquisition LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Parent, and American Reality Capital Trust, Inc., a Maryland corporation (each, a “ Party ”, and collectively, the “ Parties ”). Capitalized terms used herein and not otherwise defined shall have the same meanings as set forth in the Agreement and Plan of Merger, dated as of September 6, 2012, by and among the Parties (the “ Agreement ”).
WHEREAS, Section 8.4 of the Agreement provides that amendments may be made to the Agreement by execution of an instrument in writing signed by each of the Parties; and
WHEREAS, the Parties wish to amend the Agreement in order to add a cash component to the Merger Consideration as set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants, agreements and provisions herein contained, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:
1. Amendments to Agreement .
(a) Section 1.1(b) of the Agreement is amended by adding the following terms:
| “Cash Consideration |
Section 3.1(b) |
|
| Stock Consideration |
Section 3.1(b)” |
(b) The first sentence of Section 3.1(b) of the Agreement is deleted in its entirety and replaced with the following:
“Each share of Company Common Stock issued and outstanding immediately prior to the Effective Time (other than shares to be cancelled in accordance with Section 3.1(a) ) shall automatically be converted into the right to receive (i) 0.2874 (the “ Exchange Ratio ”) validly issued, fully paid and non-assessable shares (the “ Stock Consideration ”) of common stock, par value $0.01 per share of Parent (the “ Parent Common Stock ”), and (ii) $0.35 in cash (the “ Cash Consideration ”), subject to adjustment as provided in Section 3.1(d) (collectively, the “ Merger Consideration ”).”
(c) The second sentence of Section 3.2(a) of the Agreement is deleted in its entirety and replaced with the following:
“On or before the Effective Time, Parent shall deposit, or cause to be deposited, with the Exchange Agent (i) cash in immediately available funds and certificates representing the shares of Parent Common Stock sufficient to pay the Merger Consideration and (ii) cash in immediately available funds in an amount sufficient to pay the Fractional Share Consideration and any dividends under Section 3.2(d) (such certificates representing shares of Parent Common Stock and cash amounts, together with any dividends or other distributions with respect thereto, the “ Exchange Fund ”), in each case, for the sole benefit of the holders of shares of Company Common Stock.”
(d) The first sentence of Section 3.2(c)(ii) of the Agreement is deleted in its entirety and replaced with the following:
“Upon surrender of a Certificate (or affidavit of loss in lieu thereof) to the Exchange Agent, together with a Letter of Transmittal duly completed and validly executed in accordance with the instructions thereto, and such other documents as may reasonably be required by the Exchange Agent, the holder of such Certificate shall be entitled to receive in exchange therefor the Stock Consideration for each share of Company Common Stock formerly represented by such Certificate pursuant to the provisions of this Article III plus a check or wire transfer representing the Cash Consideration for each share of Company Common Stock formerly represented by such Certificate pursuant to the provisions of this Article III , the amount of cash such holder is entitled to receive in lieu of fractional shares of Parent Common Stock that such holder has the right to receive pursuant to the provisions of Section 3.1(b) and any amounts that such holder has the right to receive in respect of dividends or other distributions on shares of Parent Common Stock in accordance with Section 3.2(d) , to be mailed or delivered by wire transfer, within two (2) Business Days following the later to occur of (A) the Effective Time or (B) the Exchange Agent’s receipt of such Certificate (or affidavit of loss in lieu thereof), and the Certificate (or affidavit of loss in lieu thereof) so surrendered shall be forthwith cancelled.”
(e) The third sentence of Section 5.3(a) of the Agreement is deleted in its entirety and replaced with the following:
“All issued and outstanding shares of the capital stock of Parent are duly authorized, validly issued, fully paid and non-assessable, and all shares of Parent Common Stock to be issued in connection with the Merger, when so issued in accordance with the terms of this Agreement, will be duly authorized, validly issued, fully paid and non-assessable.”
(f) Section 5.22 of the Agreement is deleted in its entirety and replaced with the following:
“ Sufficient Funds . Parent has available, and Parent will provide Merger Sub at the Effective Time, sufficient cash or lines of credit available to pay the Cash Consideration, the Fractional Share Consideration, any and all amounts required to be paid in connection with the consummation of the transactions contemplated by this Agreement, including the Merger, and any related fees and expenses.”
2. Full Force and Effect; Amendment . Except as expressly amended hereby, each term, provision and Exhibit of the Agreement (i) is hereby ratified and confirmed, (ii) is hereby incorporated herein and (iii) will and does remain in full force and effect. This Amendment may not be amended except by an instrument in writing signed by the Parties.
3. Interpretation . The Parties have participated jointly in the negotiation and drafting of this Amendment. Consequently, in the event an ambiguity or question of intent or interpretation arises, this Amendment shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Amendment. When a reference is made in this Amendment to a Section, such reference shall be to a Section of this Amendment, unless otherwise indicated. The headings for this Amendment are for reference purposes only and shall not affect in any way the meaning or interpretation of this Amendment.
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4. Severability . If any term or other provision of this Amendment is invalid, illegal or incapable of being enforced under any present or future Law, or public policy, (a) such term or other provision shall be fully separable, (b) this Amendment shall be construed and enforced as if such invalid, illegal or unenforceable provision had never comprised a part hereof, and (c) all other conditions and provisions of this Amendment shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable term or other provision or by its severance herefrom so long as the economic or legal substance of the transactions contemplated by this Amendment is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Amendment so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that transactions contemplated by this Amendment be consummated as originally contemplated to the fullest extent possible.
5. Counterparts . This Amendment may be executed in one or more counterparts, and by the different Parties in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment by facsimile transmission or by e-mail of a pdf attachment shall be effective as delivery of a manually executed counterpart of this Amendment.
6. Governing Law . This Amendment and all Actions (whether based on contract, tort or otherwise), directly or indirectly, arising out of or relating to this Amendment or the actions of any Party in the negotiation, administration, performance and enforcement thereof, shall be governed by, and construed in accordance with, the laws of the State of Maryland, without giving effect to any choice or conflict of Laws provision or rule (whether of the State of Maryland or any other jurisdiction) that would cause the application of the Laws of any jurisdiction other than the State of Maryland.
7. Consent to Jurisdiction .
(a) Each of the Parties hereby irrevocably submits to the exclusive jurisdiction of the courts of the State of Maryland and to the jurisdiction of the United States District Court for the State of Maryland, for the purpose of any Action (whether based on contract, tort or otherwise), directly or indirectly, arising out of or relating to this Amendment or the actions of the Parties in the negotiation, administration, performance and enforcement thereof, and each of the Parties hereby irrevocably agrees that all claims in respect to such Action may be heard and determined exclusively in any Maryland state or federal court.
(b) Each of the Parties (i) irrevocably consents to the service of the summons and complaint and any other process in any other Action relating to the transactions contemplated by this Amendment, on behalf of itself or its property, by personal delivery of copies of such process to such Party and nothing in this Section 7 shall affect the right of any Party to serve legal process in any other manner permitted by Law, (ii) consents to submit itself to the personal jurisdiction of any United States federal court located in the State of Maryland or any Maryland state court in the event any dispute arises out of this Amendment or the transactions contemplated by this Amendment, (iii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court and (iv) agrees that it will not bring any Action relating to this Amendment or the transactions contemplated by this Amendment in any court other than any United States federal court located in the State of Maryland or any Maryland state court. Each of the Parties agrees that a final judgment in any Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law.
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8. WAIVER OF JURY TRIAL . EACH OF THE PARTIES ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE OUT OF OR RELATING TO THIS AMENDMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE), DIRECTLY OR INDIRECTLY, ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, OR THE ACTIONS OF THE PARTIES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF. EACH OF THE PARTIES CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AMENDMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8 .
[ Signature Page Follows ]
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IN WITNESS WHEREOF, the Parties have caused this Amendment to be duly executed and delivered as of the date first written above by their respective officers thereunto duly authorized.
| REALTY INCOME CORPORATION | ||||
| By: |
/s/ Gary M. Malino |
|||
| Name: | Gary M. Malino | |||
| Title: | President and Chief Operating Officer | |||
| TAU ACQUISITION LLC | ||||
| By: Realty Income Corporation, its sole member | ||||
| By: |
/s/ Gary M. Malino |
|||
| Name: | Gary M. Malino | |||
| Title: | President and Chief Operating Officer | |||
[Signature Page to First Amendment to Agreement and Plan of Merger]
| AMERICAN REALTY CAPITAL TRUST, INC. | ||||
| By: |
/s/ William M. Kahane |
|||
| Name: | William M. Kahane | |||
| Title: | President and Chief Executive Officer | |||
[Signature Page to First Amendment to Agreement and Plan of Merger]
Exhibit 99.1
REALTY INCOME CORPORATION
600 LA TERRAZA BLVD.
ESCONDIDO, CA 92025
AR Capital, LLC
405 Park Avenue
15 th Floor
New York, NY 10022
Nicholas S. Schorsch
405 Park Avenue
15 th Floor
New York, NY 10022
January 6, 2013
| Re: | Amendment to Letter Agreement dated September 6, 2012 among Realty Income Corporation, AR Capital, LLC and Nicholas S. Schorsch |
Reference is made to that (i) that certain letter agreement, dated as September 6, 2012 (the “ Letter Agreement ”), by and among Realty Income Corporation, a Maryland corporation (“ Parent ”), AR Capital, LLC, a Delaware limited liability company (“ ARC ”), and Nicholas S. Schorsch (“ Schorsch ”), and (ii) that certain First Amendment to Agreement and Plan of Merger, dated as of the date hereof (the “ Amendment ”), by and among Parent, Tau Acquisition LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Parent (“¨ Merger Sub ”), and American Realty Capital Trust, Inc., a Maryland corporation (the “ Company ”).
Pursuant to the terms of the Amendment, Parent has agreed to increase the merger consideration payable to the stockholders of the Company pursuant to the Agreement and Plan of Merger, dated as of September 6, 2012, by and among Parent, Merger Sub and the Company, by $0.35 per share in cash, and, in connection therewith, ARC and Schorsch have agreed to contribute $3,000,000 towards such increase to the merger consideration. Accordingly, in connection with the transactions contemplated by the Amendment, each of ARC, Schorsch and Parent hereby agree that the Letter Agreement is hereby amended to provide that each reference in the Letter Agreement to $15,000,000 shall be reduced to $12,000,000.
Except as expressly amended hereby, each term and provision of the Letter Agreement (i) is hereby ratified and confirmed, (ii) is hereby incorporated herein and (iii) will and does remain in full force and effect. This letter may be amended, modified or supplemented only by a written instrument executed by each of the parties hereto. This letter may be executed in two or more counterparts, each of which shall be deemed to be an original and together with this letter shall be deemed to be one and the same instrument. This letter shall be governed by and interpreted and enforced in accordance with the laws of the State of Maryland (without reference to the choice of law provisions).
[SIGNATURE PAGE FOLLOWS]
| Very truly yours, | ||
| REALTY INCOME CORPORATION | ||
| By: |
/s/ Gary M. Malino |
|
| Name: | Gary M. Malino | |
| Title: | President and Chief Operating Officer | |
[SIGNATURE PAGE TO LETTER AGREEMENT AMENDMENT]
| ACKNOWLEDGED AND AGREED TO AS OF THE DATE FIRST SET FORTH ABOVE BY: | ||
| AR CAPITAL, LLC | ||
| By: |
/s/ Nicholas S. Schorsch |
|
| Name: | Nicholas S. Schorsch | |
| Title: | Managing Member | |
|
/s/ Nicholas S. Schorsch |
||
| NICHOLAS S. SCHORSCH | ||
[SIGNATURE PAGE TO LETTER AGREEMENT AMENDMENT]
Exhibit 99.2
| Realty Income Contact | ARCT Contact: | |
| Tere H. Miller | Brian D. Jones | |
| Vice President, Corporate Communications | CFO & Treasurer | |
| (760) 741-2111, Ext. 1177 | (646) 937-6900 |
Realty Income and American Realty Capital Trust Announce Amended Merger Agreement
Realty Income Provides ARCT Stockholders with One-Time Cash Payment of $0.35 per Share in Addition to the
Existing Fixed Exchange Ratio of 0.2874 Realty Income Shares for Each Share of ARCT Common Stock Owned
Realty Income Intends to Increase Annualized Dividend
Realty Income Provides 2012 Acquisition Update
Amended Agreement Represents Realty Income’s Best and Final Offer
ESCONDIDO, California and NEW YORK, New York, January 7, 2013 — Realty Income Corporation, the Monthly Dividend Company®, (NYSE: O) (“Realty Income”) and American Realty Capital Trust, Inc., (NASDAQ: ARCT) (“ARCT”) today announced that they have signed an amendment (the “Amendment”) to the previously announced definitive merger agreement (the “Merger Agreement”) between the two companies. Under the terms of the Merger Agreement, as amended by the Amendment, Realty Income will now pay ARCT stockholders a one-time cash payment of $0.35 per share in addition to the existing fixed exchange ratio of 0.2874 Realty Income shares for each share of ARCT common stock that they own. The additional cash consideration of $0.35 per share totals approximately $55.5 million in additional proceeds for the ARCT stockholders, of which approximately $52.5 million is being funded by Realty Income and $3.0 million by AR Capital LLC, including William M. Kahane, Chief Executive Officer, President and Director of ARCT, and Nicholas S. Schorsch, Chairman of the board of directors of ARCT.
Realty Income also announced that upon the closing of the transaction, its board of directors intends to increase the annualized dividend to Realty Income stockholders by approximately $0.35 per share, to an annualized rate of $2.17 per share beginning with the February 2013 distribution. This represents a $0.22 increase to the original dividend increase of $0.13 per share that Realty Income estimated when the transaction was initially announced. In addition, based on Realty Income’s strong revenue and Adjusted Funds from Operations outlook for 2013, Realty Income announced that its board of directors intends to raise the annualized dividend by $0.10 per share in February 2013 even if the ARCT transaction does not close. The $0.35 per share estimated annualized dividend increase expected after the close of the merger with ARCT includes this $0.10 per share increase.
Tom A. Lewis, Chief Executive Officer of Realty Income commented, “We strongly believe in the merits of this transaction, which will advance our strategic objectives of increasing our revenue generated by investment grade tenants and further diversifying our portfolio. The amended agreement announced today represents our best and final offer. By upsizing the increase of the annualized dividend to be paid, assuming the closing of the ARCT acquisition, we believe we have materially addressed the difference in dividend rates and that the interests of ARCT stockholders, as well as Realty Income’s existing stockholders, will be well served.”
Nicholas S. Schorsch, Chairman of ARCT, said, “We are extremely pleased to have reached this amended agreement with Realty Income. The ARCT board is confident that this increased offer from Realty Income not only achieves the highest attainable value for our stockholders, but also allows them to participate in the potential upside of the combined company. The $0.35 per share cash payment will provide ARCT stockholders with an immediate increase in transaction value of approximately $55.5 million, and the Realty Income dividend increase will enhance the income stream for ARCT stockholders as the combined company continues to grow.”
Realty Income and ARCT have confirmed that if ARCT stockholders do not approve the merger on its revised terms, then the Merger Agreement will be terminated, and if Realty Income obtains its stockholder approval, Realty Income will receive $4.0 million in expense reimbursement from ARCT. As disclosed in ARCT’s January 2, 2013 press release, the ARCT management team will continue to operate and grow ARCT consistent with its established operating, investment and capitalization strategies, should the Merger Agreement be terminated.
All other terms and conditions remain the same as those set out in the Merger Agreement as described in detail in the definitive proxy mailed to Realty Income and ARCT stockholders on December 6, 2012 and available on www.sec.gov. The transaction is expected to close in January 2013, following a vote by the stockholders of both companies on January 16, 2013.
The Special Meeting of Realty Income stockholders to consider and vote on the proposal to approve the issuance of shares of Realty Income common stock in connection with the acquisition, is scheduled for January 16, 2013. Realty Income stockholders of record as of December 6, 2012 will be entitled to vote on the proposal.
The Special Meeting of ARCT stockholders to consider and vote upon a proposal to approve the merger with Realty Income and the other transactions contemplated by the Merger Agreement providing for the acquisition of ARCT by Realty Income is scheduled for January 16, 2013. ARCT stockholders of record as of December 6, 2012 will be entitled to vote at the Special Meeting.
Realty Income and ARCT expect to file additional supplemental materials regarding the Amendment with the Securities and Exchange Commission soon and stockholders are urged to review these materials when available.
Realty Income 2012 Acquisitions and Dividend Update
Realty Income further announced that based on fourth quarter 2012 acquisitions activity, Realty Income’s total 2012 acquisitions have exceeded previous guidance. During the fourth quarter of 2012, Realty Income invested $449 million in real estate acquiring 189 new properties. For the year ended December 31, 2012, Realty Income invested $1.16 billion in real estate acquiring 423 new properties. This acquisition volume represents the highest annual level of acquisitions in Realty Income’s operating history. Based on this record acquisition year, Realty Income anticipates material increases in both funds from operations and adjusted funds from operations during 2013, whether or not the acquisition of ARCT is consummated. As noted above, given Realty Income’s strong outlook for 2013, it is also anticipated that the board of directors of Realty Income will raise the dividend by an annualized amount of $0.10 per share in February even if the ARCT transaction does not close.
BofA Merrill Lynch and Wells Fargo Securities are exclusive financial advisors to Realty Income on the transaction and Latham & Watkins LLP is legal counsel. Goldman, Sachs & Co. is the exclusive financial advisor to ARCT and Proskauer Rose LLP is legal counsel.
About Realty Income
Realty Income is The Monthly Dividend Company®, a New York Stock Exchange real estate company dedicated to providing stockholders with dependable monthly income. To date, Realty Income has paid 509 consecutive monthly dividend payments throughout its 43-year operating history and has raised the dividend 69 times since listing on the New York Stock Exchange in 1994. The monthly income is supported by the cash flow from over 3,000 properties owned under long-term lease agreements with 150 leading regional and national retail chains and other commercial enterprises. The company is an active buyer of commercial properties nationwide. Additional information about the company can be obtained from the corporate website at www.realtyincome.com.
About American Realty Capital Trust
American Realty Capital Trust, Inc., a publicly traded Maryland corporation listed on The NASDAQ Global Select Market under the trading symbol “ARCT”, is a leading self-administered real estate company that owns and acquires single tenant free standing commercial real estate properties that are primarily net leased on a long-term basis to investment grade rated and other creditworthy tenants. Additional information about the Company can be found on the Company’s website at www.arctreit.com.
Forward-Looking Statements
Information set forth herein (including information included or incorporated by reference herein) contains “forward-looking statements” (as defined in Section 21E of the Securities Exchange Act of 1934, as amended), which reflect Realty Income’s and ARCT’s expectations regarding future events. The forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those contained in the forward-looking statements. Such forward-looking statements include, but are not limited to whether and when the transactions contemplated by the merger agreement will be consummated, the new combined company’s plans, market and other expectations, objectives, intentions and other statements that are not historical facts.
The following additional factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: the ability to obtain regulatory approvals for the transaction and the approval of the merger agreement by the stockholders of both parties; unexpected costs or unexpected liabilities that may arise from the transaction, whether or not consummated; the inability to retain key personnel; continuation or deterioration of current market conditions; future regulatory or legislative actions that could adversely affect the companies; and the business plans of the customers of the respective parties. Additional factors that may affect future results are contained in Realty Income’s and ARCT’s filings with the SEC, which are available at the SEC’s website at www.sec.gov. Realty Income and ARCT disclaim any obligation to update and revise statements contained in these materials based on new information or otherwise.
Additional Information and Where to Find It
These materials are not a substitute for the Registration Statement on Form S-4 (File No. 333-184201) that Realty Income filed with the SEC in connection with the proposed transaction with ARCT, or the definitive joint proxy statement/prospectus sent to security holders of Realty Income and ARCT on or about December 6, 2012 seeking their approval of the proposed transaction. INVESTORS AND SECURITY HOLDERS OF REALTY INCOME AND ARCT ARE URGED TO CAREFULLY READ THESE DOCUMENTS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS AND SUPPLEMENTS TO THOSE DOCUMENTS, AS THEY CONTAIN IMPORTANT INFORMATION, INCLUDING DETAILED RISK FACTORS. Investors and security holders may obtain a free copy of the joint proxy statement/prospectus and other documents filed by Realty Income and ARCT with the SEC at the SEC’s web site at www.sec.gov. This document does not constitute an offer to sell, or a solicitation of an offer to buy, any shares of Realty Income or ARCT common stock.
Additional ARCT Contacts:
Investors:
Thomas Germinario / Richard Grubaugh
D.F. King & Co., Inc.
(212) 269-5550
Media:
Averell Withers / Jamie Moser / Matthew Sherman
Joele Frank, Wilkinson Brimmer Katcher
(212) 355-4449