NEW
YORK, June 15, 2023 /PRNewswire/ -- Orange
Capital Ventures, LP ("Orange Capital"), a New York-based investment firm, today
announced its intention to vote against the proposed merger (the
"Merger") of Global Net Lease, Inc. (NYSE: GNL) ("GNL" or the
"Company") and Necessity Retail REIT (Nasdaq: RTL)("RTL"). Orange
Capital delivered a letter to the Company's Board of Directors on
June 6th, 2023 highlighting its
opposition to the transaction.
Specifically:
- THE MERGER IS VALUE DESTRUCTIVE: We believe there are far
better value creating alternatives available to the GNL board and
Company shareholders than the RTL Merger. For example, we
estimate that a standalone internalization plan for GNL would
likely yield a GNL price closer to $22 per share (12x pro-forma AFFO, +109% from the
last close). We believe the Merger has little industrial logic and
is a complete reversal of management's strategy to avoid retail
exposure. The Merger presentation conspicuously lacks any
comparable analysis of industrial vs. retail REITs. Importantly,
the Merger is subject to a shareholder vote and will likely be
reviewed by proxy advisory firms.
- The effect of the Merger will cut GNL's dividend and
resulted in the Company's credit ratings being put on negative
watch by Fitch.
- THE MERGER IS DESIGNED TO ENRICH AR GLOBAL: We estimate a
staggering $375 million of value is
being transferred to AR Global as compensation for internalization
of the REIT under the proposed Merger, with AR Global receiving
estimated annual dividends of $42
million. This number skyrockets to an estimated
$547 million, 8.4x annual GNL-RTL
advisory fees, should GNL ever reach 10x pro-forma AFFO per share.
AR Global is only entitled to 2.5x annual advisory fees if there is
a change of control at GNL.
- Blackwells, having previously called the Merger "cockamamie"
and full of "ransom payments" to AR Global, will now receive
$23 million in shares if the Merger
closes. We believe GNL's apparent willingness to buy
shareholder support clearly resembles a greenmail payment and is an
indictment of how corrupt this Merger is. We believe Blackwells
obliterated all its credibility with shareholders by abruptly
retreating from its previous position as part of a "Cooperation
Agreement" that compensates them an estimated $23 million worth of GNL stock (2.095 million GNL
shares) for their support. Blackwells' most recent presentation in
support of the merger fails to highlight this devastating conflict
of interest. The Cooperation Agreement makes the Merger more
dilutive for GNL shareholders while effectively reducing
Blackwells' cost basis by approximately $5.50 per share, a 50% discount to GNL's
unaffected stock price of $10.97.
Bottom of Form
The full text of the letter can be found here.
About Orange Capital
Orange Capital Ventures GP, LP is a New York based investment manager in private
and public equity and debt. Orange Capital LLC was founded in 2004
by Mr. Daniel Lewis, who serves as
Managing Partner.
Forward-Looking Statements
This release contains a number of forward-looking statements.
Words such as "plan," "believe," "anticipate," "reflect," "invest,"
"see," "make," "expect," "deliver," "drive," "improve," "intend,"
"assess," "remain," "evaluate," "establish," "focus," "build,"
"turn," "expand," "leverage," "grow," "will," and variations of
such words and similar future or conditional expressions are
intended to identify forward-looking statements. Examples of
forward-looking statements include, but are not limited to,
statements regarding Orange Capital's, GNL's, RTL's or AR Global's
plans, impacts of accounting standards and guidance, growth, legal
matters, taxes, costs and cost savings, impairments, dividends,
expectations, investments, innovations, opportunities,
capabilities, execution, initiatives, and pipeline. These
forward-looking statements reflect management's current
expectations and are not guarantees of future performance and are
subject to a number of risks and uncertainties, many of which are
difficult to predict and beyond the Issuer's control. Orange
Capital disclaims and does not undertake any obligation to update,
revise, or withdraw any forward-looking statement in this press
release, except as required by applicable law or regulation.
Bottom of Form
Investor Contacts:
Daniel
Lewis, Orange Capital
Walied Soliman, Norton Rose
Fulbright LLP
GNL.OrangeCap@gmail.com
Media Contacts
ASC Advisors
Taylor Ingraham / Steve Bruce
tingraham@ascadvisors.com / sbruce@ascadvisors.com
203 992 1230
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SOURCE Orange Capital Ventures, LP