Activist investor Marcato Capital Management LP asked American Realty Capital Properties Inc. to curb its acquisition spree and complained that a recent stock sale hurt existing shareholders.
“The company is engaging in too many transformative transactions too quickly,” Mick McGuire, managing partner at Marcato, wrote in a letter to Leslie Michelson, American Realty’s lead independent director, that was included in a statement today. “ARCP should pause on large-scale transaction activity and give investors a chance to see multiple quarters of clean financial results.”
Marcato, based in San Francisco, owns 21.8 million shares of American Realty, according to the statement. The New York- based real estate investment trust, whose chairman and chief executive officer is Nicholas Schorsch, has expanded through acquisitions since it first sold shares to the public in September 2011. The company is now the largest owner of U.S. single-tenant buildings, which are leased to businesses such as drugstores and fast-food restaurants.
American Realty raised its acquisition target for the year to $4.5 billion from its initial plan of $3 billion, according to an investor presentation filed with regulators today.
“Our board of directors and management team regularly review the company’s strategic priorities and opportunities, including deleveraging, capital allocation, and assess a variety of strategic options,” American Realty said in a response to Marcato’s letter. “We are committed to driving value for all ARCP stockholders and will continue to take actions to achieve this important objective.”