American Realty Capital Trust Inc (NASDAQ:ARCT) Investor Files Lawsuit Over Alleged Breaches Of Fiduciary Duties In Connection With The Proposed Takeover by Realty Income Corporation

If you purchased shares of the American Realty Capital Trust Inc (NASDAQ:ARCT) prior to September 6, 2012, and currently hold any of those NASDAQ:ARCT shares, you have certain options and you should contact the Shareholders Foundation, Inc.

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Company Name(s): 
American Realty Capital Trust
Case Name: 
American Realty Capital Trust Deal Case 09/21/2012
Case Status: 
Lawsuit Filed
Affected Securities
NASDAQ: ARCT
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 
09/21/2012
Summary: 

January 7, 2013 (Update) -- American Realty Capital Trust announced an amended merger agreement, which will provide ARCT stockholders with an additional cash consideration of $0.35 per share.

September 21, 2012 (Shareholders Foundation) -- An investor in shares of American Realty Capital Trust Inc (NASDAQ:ARCT) filed a lawsuit against directors in effort to stop the proposed takeover of American Realty Capital Trust Inc at a value of $12.21 per NASDAQ:ARCT share.

The plaintiff alleges that the defendants breached their fiduciary duties owed to NASDAQ:ARCT investors arising out of the attempt to sell the company too cheaply via an unfair process to Realty Income Corporation.

On September 6, 2012, Realty Income Corporation (NYSE: O) and American Realty Capital Trust, Inc. (NASDAQ: ARCT) announced that they have signed an agreement under which Realty Income Corporation will acquire all of the outstanding shares of American Realty Capital Trust in a transaction valued at approximately $2.95 billion. Under the terms of the agreement, American Realty Capital Trust, Inc. (NASDAQ: ARCT) shareholders will receive a fixed exchange ratio of 0.2874 Realty Income Corporation (NYSE: O) shares for each share of American Realty Capital Trust common stock that they own. Based on Realty Income's closing stock price of $42.48 on September 5, 2012, this consideration would be equivalent to $12.21 per NASDAQ: ARCT share.

However, the plaintiff alleges that the offer by Realty Income Corporation is unfair to NASDAQ:ARCT stockholders and undervalues the company. Indeed, at least one analyst has set the high target price for NASDAQ:ARCT shares at $13.00 per share. Furthermore, American Realty Capital Trust’s financial performance improved lately. It reported that its annual Revenue skyrocketed from $5.55 million in 2008 to $129.12 million in 2011. Shares of American Realty Capital Trust Inc (NASDAQ:ARCT) grew from as low as $10.23 per share to slightly below $12 per share on September 5, 2012.

Furthermore, so the plaintiff, the takeover process is unfair to NASDAQ:ARCT stockholders as well. In fact, the proposed transaction includes deal protection devices, such as a $51million termination fee provision and a no solicitation provision that effectively guarantee that no higher bidder will emerge.