American Realty Capital Properties Inc. Selling Shopping Centers to Fund Red Lobster Deal

American Realty Capital Properties (NASDAQ: ARCP  ) announced today it would be selling $1.975 billion worth of property to Blackstone (NYSE: BX  ) to fund its previously announced $1.5 billion acquisition of more than 500 Red Lobster properties.

Last Friday, Darden Restaurants announced it had agreed to sell Red Lobster to private equity firm Golden Gate Capital for $2.1 billion. Golden Gate Capital entered into an agreement with American Realty Capital Properties to sell it the properties at more than 500 restaurants and in turn lease them back from ARCP.

In order to fund the acquisition of the Red Lobster properties, ARCP will cancel its efforts to spin off its multitenant shopping centers into another publicly traded REIT known as American Realty Capital Centers. Instead, it will sell nearly all of the properties to Blackstone for $1.975 billion and expects the transaction to be complete within the next 30 days.

"The previously announced spin-off of our multi-tenant portfolio created visibility and optionality for ARCP in connection with its multi-tenant assets," said the chairman and CEO of American Realty Capital Properties, Nicholas Schorsch, in the announcement today. "Thus, we were able to explore various avenues to create stockholder value during the time we prepared for the spin-off. We now believe the sale of the multi-tenant portfolio will deliver the best value creation option to our shareholders."

American Realty Capital Properties said that it was increasing its acquisitions target for 2014 to $4.5 billion, as the $1.5 billion Red Lobster real estate portfolio would put it at its previous goal of $3.0 billion well ahead of year's end.

In addition to the sale of the properties to Blackstone, ARCP also announced it would be issuing more than 100 million new shares of common stock in an effort to repay certain debt obligations as well as for other general corporate purposes. As of May 7, 2014, it had approximately 770 million shares of common stock outstanding, and the move announced today would will increase its share count by 13%.  

Top dividend stocks for the next decade
Our top analysts put together a report on a group of high-yielding stocks that should be in any income investor’s portfolio. To see our free report on these stocks, just click here now.


Read/Post Comments (0) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2966828, ~/Articles/ArticleHandler.aspx, 7/28/2014 3:04:27 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

TREND TRACKER: Get Rich When the Web Goes Dark

It's time to say "goodbye" to your Internet! One bleeding-edge technology is about to put the World Wide Web to bed. And if you act right away, it could make you wildly rich. Experts are calling it the single largest business opportunity in the history of capitalism… The Economist is calling it "transformative"... but you'll probably just call it "how I made my millions." Big money is already on the move. Don't be too late to the party – find out the 1 stock to own when the Web goes dark.


Advertisement