American Realty Capital Properties, Inc. (NasdaqGS:ARCP) made an offer to acquire Cole Credit Property Trust III, Inc. for $5.4 billion on March 19, 2013. Shareholders of CCPT III may elect to receive either $12 per CCPT III common stock in cash or 0.80 shares of ARCP common stock for each share of CCPT III common stock, with a guarantee that the value of the stock consideration will not be less than $12 per share. The proposal provides that up to $1.15 billion or approximately 20% of the outstanding shares of CCPT III common stock be paid in cash and the balance in ARCP common stock.

ARCP would be willing to consider increasing the maximum consideration to be paid in cash to 40% of the outstanding shares of CCPT III common stock, so long as CCPT III stockholders preserve their tax-free exchange safe harbor. In the event the Internalization Transaction is consummated, ARCP would need to reconsider its Proposal, and potentially reduce its proposed valuation. CCPT III shares converted into ARCP shares will be immediately tradable on NASDAQ. The cash component of acquisition is fully funded through cash on hand and borrowing capacity under ARCP's existing line of credit.

On March 19, 2013, ARCP obtained additional commitments under the credit agreement in an aggregate amount of up to $650 million which if drawn will be used to fund the transaction. The transaction is subject to customary conditions, including completion of confirmatory due diligence by ARCP on CCPT III, execution of a definitive merger agreement and receipt of approvals from ARCP stockholders. The deal has been unanimously approved by Board of Directors of ARCP. As of March 21, 2013, the deal was rejected by the Board of Directors of Cole. ARCP expects the proposed transaction will be immediately accretive to AFFO by 10%.

ARCP made a revised offer to acquire CCPT III for $5.6 billion on March 27, 2013. Shareholders of CCPT III may elect to receive either $12.5 per CCPT III common stock in cash or 0.80 shares of ARCP common stock for each share of CCPT III common stock, with a guarantee that the value of the stock consideration will not be less than $13.59 per share. The rest of the terms remain the same. As on March 28, 2013, special committee of CCPT III reiterated that it remains committed to its previously announced course of action to acquire Cole. ARCP will increase its dividend to $0.93 per share upon closing, meaning all CCPT III stockholders who elect stock consideration will receive an equivalent dividend of $0.74 per share.

As on April 2, 2013, ARCP took the offer public due to CCPT III's continuing unwillingness to engage with ARCP. Pursuant to the proposal, ARCP would acquire all the outstanding shares of common stock of CCPT III in exchange for, at the election of each holder of shares of CCPT III common stock, with respect to each such share of CCPT III common stock, for either 0.8 of a share of ARCP common stock for each share of CCPT III common stock, with a guarantee that the value of the share consideration will not be less than $13.59 per share or $12.5 per CCPT III share in cash. The proposal provides that up to 60% of the outstanding shares of CCPT III common stock be paid in cash. At 60% cash consideration, the proposal will assure that ARCP stockholders retain approximately 60% ownership in the combined company. As of April 3, 2013, Cole Credit Property had confirmed receipt of a second revised unsolicited proposal received on April 2, 2013. As on April 5, 2013, special committee of Cole Credit Property Trust III rejected the unsolicited proposals as the acquisition is not in best interests of Cole Credit Property.

Lisa Beeson and Schecky Schechner of Barclays Capital Inc. and Realty Capital Securities, LLC acted as financial advisors to ARCP while Peter Fass, Daniel Ganitsky, Andrew Bettwy, Glen Lim, Michael Ellis, Leon Volchyok and Andrea Hwang of Proskauer Rose LLP acted as legal advisor to ARCP. Tom Johnson and Ian Campbell of Abernathy MacGregor and Anthony J. DeFazio of Diccicco Battista Communications acted as public relations advisors in the transaction. Michael Aiello, Matthew Gilroy, Sachin Kohli, Megan Pendleton and Danielle Barnes of Weil, Gotshal & Manges LLP acted as legal advisors to ARCP. Alison Ressler and Benjamin Weber of Sullivan & Cromwell LLP acted as legal advisors for Cole Real Estate. Lazard and Goldman, Sachs & Co. acted as financial advisor while Wachtell, Lipton, Rosen & Katz and Venable LLP acted as legal advisor for the Special Committee of the Board of Directors of CCPT III. Morris, Manning & Martin, LLP acted as legal advisor for CCPT III. Joele Frank, Meaghan Repko, and Nick Lamplough of Wilkinson Brimmer Katcher acted as public relations advisors in the transaction.