Investors Of Cole Real Estate Investments Inc (NYSE:COLE) Give Thumbsup To Deal

Posted by Lynn Eisler October 24, 2013 0 Comment 929 views

American Realty Capital Properties has finalized the deal to acquire Cole Real Estate Investments Inc (NYSE:COLE) for around $7.2B in cash as well as stock to create the biggest net-leased REIT in the United States, said both the companies on Wednesday.

American Realty said that this acquisition will expand its portfolio size to 3,732 properties, most of which are retails stores. This merger will also create the 14th-largest publicly-traded United States REIT and will position American Realty as a contender for joining the S&P 500 Index which will definitely attract a larger number of institutional investors. American Realty had made an attempt to acquire Cole Real Estate Investments Inc (NYSE:COLE) six months ago, in vain.

Better companies

Nicholas Schorsch, The American realty Chairman and CEO will head both the companies and said that today; they both are better companies due to this merger. Over the last few years Net lease REIT’s have grown in popularity primarily due to the high dividend payout. This is definitely an attraction point for investors, given the low interest environment that currently exists.

This kind of an investment trust has the capability to give out large dividends because the tenants take on long-term leases and most of the costs that are associated with that property are paid by them. This kind of an arrangement, in effect, created a bond-like investment and diversity and scale are important for a company like this said Schorsch.

Wednesday’s trading

In Wednesday’s trading, Cole Real Estate Investments Inc (NYSE:COLE) ROSE BY 8.81%. The opening price of the shares was $14.67, which climbed to an intraday high of $14.68 and dipped to a close of $13.95. Approximately 100.11 million shares were traded on Wednesday while an average volume of 10.63 million shares were traded over a 30 day period.

About Lynn Eisler

Lynn Eisler is a national news reporter focusing on economic issues, data analysis and the financial health of state and local governments. Lynn has been honored with the H.L. Mencken Award for Investigative Reporting, the Champion of Justice Award for reporting on the drug war, and the John Hancock Award for business reporting. Lynn was also a Knight Medical School Fellow at the University of Michigan.

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