American Finance Trust to List on NASDAQ
July 2, 2018 | James Sprow | Blue Vault
In an 8-K filing on June 29, American Finance Trust Inc. announced that it had gained board approval for the proposed listing of the trust's common stock on The Nasdaq Global Select Market.
The nontraded real estate investment trust expects to trade its common shares under the ticker “AFIN” starting on or about July 19. The listing will not result in total liquidity for current common stockholders. Rather, only 50% of AFIN’s common shares will be freely tradeable upon listing. A 25% “tranche” of the common shares will become freely tradeable 90 days following the initial listing. The final 25% tranche of AFIN’s common shares will become freely tradeable 180 days following the initial listing.
The REIT also announced that in early July, in conjunction with the listing, it will amend its charter to implement a 2-to-1 reverse stock split, whereby every two common shares will be combined into one share, and will change the name of the common stock to class A common stock, among other corporate actions.
Additionally, the board terminated the REIT's share repurchase program, effective June 30, and suspended its distribution reinvestment plan, effective immediately.
No shares will be sold in connection with the listing. The Board has authorized a share repurchase program of up to $200 million that the Company may implement, from time to time, following the listing. The Company will have the ability to repurchase shares up to this amount at its discretion.
The REIT has $3.5 billion in book value of assets in a portfolio of 558 properties with 19.1 million square feet concentrated in high-quality retail properties. The largest tenants include SunTrust Bank, Sanofi US, Americold, Stop & Shop, and Lowe’s. The weighted average remaining lease term is 8.3 years and occupancy was 94.3% as of March 31, 2018.
The per share distribution rate is currently $1.10 annualized, paid monthly, which is a rate of 4.40% based upon the original share price in the offering of $25.00.
On April 30, 2018, the Company commenced a tender offer for up to 1,000,000 shares of the Company’s common stock at a price of $15.45 per share. The Company made the offer in order to deter an unsolicited bidder and other potential future bidders that in the Company’s opinion was to exploit the illiquidity of the Company’s common stock and acquire it from stockholders at prices substantially below the current estimated per-share NAV. The estimated per share NAV was $23.56 as of December 31, 2017. On May 31, 2018, the Company announced that 207,713 shares were validly tendered and had been accepted for purchase at a price of $15.45 per share.
Sources: SEC, Blue Vault
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