Sandell Opposes American Realty Capital Trust's Sale to Realty Income Corporation

    Sandell Opposes American Realty Capital Trust's Sale to Realty Income

Finds Price Inadequate, Process Flawed, Timing Suspect

PR Newswire

NEW YORK, Oct. 19, 2012

NEW YORK, Oct. 19, 2012 /PRNewswire/ --In response to Realty Income
Corporation's proposed merger agreement with American Realty Capital Trust,
Sandell Asset Management's Chief Executive Officer Thomas E. Sandell sent
today the following letter to American Realty Capital Trust's Board of

Board of Directors
American Realty Capital Trust, Inc.
405 Park Avenue, 14th Floor
New York, NY 10022
Attn: William M. Kahane, Chief Executive Officer and President


Sandell Asset Management Corp. is the beneficial owner of approximately 1.8%
of the outstanding shares of American Realty Capital Trust, and we write to
you today to convey our support of the views expressed by Luxor Capital Group
earlier this week in opposing the proposed acquisition of ARCT by Realty
Income Corporation. We similarly intend to vote against the proposed merger
on its current terms and will encourage our fellow stockholders to do

ARCT has an outstanding real estate portfolio with long-term leases from
primarily investment grade tenants, provides an excellent dividend yield and
has outstanding growth prospects. Based on a blend of several different
valuation metrics, we believe ARCT to have a stand-alone value of $13.50 per
share. ARCT brings significant value to Realty Income, enhancing the
diversification, occupancy rate, lease duration and tenant credit quality in
its portfolio. The transaction is immediately accretive to Realty Income's
FFO, and enables it to increase its dividend. The $12.21 per share implied
value of the transaction to ARCT shareholders on the announcement date, and
the $11.88 per share implied value based on Realty Income's current stock
price, is simply grossly inadequate.

Realty Income's implied offer price represented only a 2.1% premium over
ARCT's closing price on the day prior to the merger announcement,
aberationally low for a control premium. This is neither a merger-of-equals
nor an acquisition of a distressed seller. Your argument that it represents a
healthier premium over your IPO price misses the point entirely – that
increase in value was already in the stock price and Realty Income should be
paying a much more substantial premium to that current value. The exchange
ratio is simply unfair to ARCT shareholders, and it delivers a stock with a
dividend per share about 20% lower than what they receive from ARCT.

We are further concerned that this transaction is the product of a deeply
flawed sale process. Your preliminary proxy statement indicates that the
Company was shopped in the summer of 2011, prior to its IPO, with interest
solicited from over 40 third parties. The bids received (including from
Realty Income), were viewed as inadequate, and the Company instead IPO'd on
March 1, 2012. In August 2012, Realty Income renewed its interest, and the
Company from that point dealt exclusively with Realty Income and neither it
nor its banker solicited interest from any other buyer. Why not? Realty
Income's offer is certainly not preemptive. And having dealt exclusively with
Realty Income, why did you not get the right to "go shop" for a better offer
for shareholders? What was the rush, so soon after your listing, to
consummate a sale transaction? We fear Luxor may have identified the reason –
a compensation plan that rewarded management for any value created in the six
months following the IPO.

We hope that you will reconsider the proposed merger with Realty Income. It
clearly fails to maximize value for ARCT shareholders. In the meantime, we
have no choice but to join Luxor in voicing our disapproval of the merger and
urging our fellow stockholders to vote against it.


Thomas E. Sandell

Chief Executive Officer

CONTACT: Mr. Tom Sandell, Chief Executive Officer, Sandell Asset Management
Corp., +1-212-603-5700

SOURCE Sandell Asset Management
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