American Finance Trust & ARC Retail Centers of America Merger

Recovery of Investment Losses in American Finance Trust and ARC Retail Centers of America

Have you suffered investment losses in American Finance Trust (AFT) and/or American Realty Capital Retail Centers of America, Inc.? If so, the securities attorneys of The White Law Group may be able to help you.

On September 7, 2016, American Finance Trust, Inc. (AFIN) and American Realty Capital Retail Centers of America, Inc. (ARC RCA) announced that each company’s respective special board of directors committee approved a merger agreement, under which AFIN will acquire all of ARC RCA’s outstanding common stock for consideration of $1.4 billion.

The $1.4 billion in consideration consists of AFIN common stock, cash and assumption of debt.  Total consideration to ARC RCA shareholders is approximately $10.26 per share, and will consist of $0.95 in cash consideration and 0.385 shares of AFIN common stock.  The merger agreement includes a 45 day go-shop period in which ARC RCA may solicit alternative proposals to the merger agreement, with a $5.1 million termination payment payable to AFIN in the event ARC RCA selects an alternative proposal.  Shareholders for AFIN and ARC RCA must approve the transaction and a joint proxy statement and prospectus is forthcoming.

Additionally, on September 6, 2016, AFIN amended its second amended and restated advisory agreement, which increases the fixed portion of the advisor’s base management fee from $18 million annually to $21 million for the first year following the merger of ARC RCA and AFIN, $22.5 for the second year, and $24 million annually for the remainder of the agreement, which is set to expire in April 2035.  Additionally, the fund may increase the base management fee, to unspecified amounts, in the event of subsequent mergers or consolidations with certain affiliates.

The White Law Group is investigating potential claims.

Compared to traditional investments, such as stocks, bonds and mutual funds, non-traded REITS, like American Finance Trust  and American Realty Capital are considerably more complex and involve a high degree of risk. Unfortunately many investors were not made adequately aware of the risks and liquidity problems associated with REITs.

The White Law Group has represented numerous investors in claims against the brokerage firm that recommended non-traded REITs to these investors.

Broker dealers are required to perform adequate due diligence on any investment they recommend and to ensure that all recommendations are suitable for the investor. Recommendations should be inline with the investor’s age, risk tolerance, net worth, and investment experience.

Broker dealers that fail to adequately disclose risks or make unsuitable investment recommendations can be held liable for investment losses.

If you have invested in American Finance Trust and/or American Realty Capital Retail Centers and would like to speak to a securities attorney about the potential to recover your investment losses, please call The White Law Group at 1-888-637-5510 for a free consultation.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Vero Beach, Florida.

For more information on The White Law Group, visit www.whitesecuritieslaw.com.