Insider trades abound during American Realty Capital deal
American Realty Capital Trust Inc. (NASDAQ:ARCT) recently announced it will be acquired by Realty Income Corp. for $1.93 billion, which helped the company's stock rise throughout the day. News of the deal was accompanied by heavy insider trading reported with the Securities and Exchange Commission.
According to Reuters, the deal would increase rental revenue from investment-grade tenants like FedEx and Walgreen's by about 75 percent. With the addition of these new tenants, Realty Income's current portfolio is expected to raise the portion of overall revenue created by such tenants to 34 percent from 19 percent.
Rich Moore, an analyst at RBC Capital Markets, said Realty Income told him it had been planning to buy American Realty for several years now to gain access to its portfolio. Moore added that a counterbid will not be taken, since "Realty Income has the lowest cost of capital in the net lease space and few other buyers could swallow an acquisition of this size."
It appears insider trades were made prior to the deal, as heavy trading was reported in the months leading up to the announcement.
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