Cole Nontraded REITs Extend Go-Shop Periods in Merger Agreements
October 30, 2020 | SEC
Cole Credit Property Trust V, Inc. and Cole Office & Industrial REIT II, Inc. have extended the Go Shop termination periods in their respective Agreements and Plans of Merger (“Merger Agreements”) with CIM Real Estate Finance Trust, Inc. In October 28, 2020, 8-K filings with the SEC the nontraded REITs announced entering into Amendments to Agreements and Plans of Merger pursuant to which the companies were granted another extension under limited circumstances to timely deliver a change notice in order for the Go Shop Termination Payment to be applicable in those circumstances.
In layman’s terms, the REITs have extended the time that they have under the Merger Agreements to receive competitive offers prior to merging with CIM Real Estate Finance Trust, Inc. A similar extension was not reported for Cole Office & Industrial REIT III, Inc., the third REIT that has been proposed to merge with CIM Real Estate Finance Trust, Inc.
On August 31, 2020, CIM Real Estate Finance Trust, Inc. (“CMFT”), Cole Office & Industrial REIT (CCIT II), Inc. (“CCIT II”), Cole Office & Industrial REIT (CCIT III), Inc. (“CCIT III”) and Cole Credit Property Trust V, Inc. (“CCPT V”) announced that the companies have entered into definitive agreements whereby CMFT would acquire each of CCIT II, CCIT III and CCPT V in separate tax-free merger transactions.
At the time of the proposed merger, CCIT II common shares would be converted into the right to receive 1.501 shares of CMFT’s common stock. If the Merger Agreement is terminated in connection with the Company’s acceptance of a Superior Proposal or making an Adverse Recommendation Change, then the Company must pay to CMFT a termination fee of (i) $7,380,000 if such termination occurs no later than ten business days after the Go Shop Period End Time, or, in the event of timely delivery to CMFT of a CCIT II Change Notice (as defined in the Merger Agreement), the end of the specified period for negotiations with CMFT following receipt of such CCIT II Change Notice in accordance with the Merger Agreement) or (ii) $18,450,000 if such termination occurs thereafter and, in each of clauses (i) and (ii), up to $3,690,000 as reimbursement for CMFT’s Expenses.
At the time of the proposed merger, each CCPT V common share would be converted into the right to receive 2.691 shares of CMFT’s common stock. If the Merger Agreement is terminated in connection with the Company’s acceptance of a Superior Proposal or making an Adverse Recommendation Change, then the Company must pay to CMFT a termination fee of (i) $4,170,000 if such termination occurs no later than ten business days after the Go Shop Period End Time, or, in the event of timely delivery to CMFT of a Change Notice (as defined in the Merger Agreement), the end of the specified period for negotiations with CMFT following receipt of such Change Notice in accordance with the Merger Agreement) or (ii) $9,170,000 if such termination occurs thereafter and, in the case of clauses (i) and (ii), up to $1,670,000 as reimbursement for CMFT’s Expenses.
Source: SEC
