American Realty Capital Properties Inc., the largest owner of single-tenant U.S. buildings, is interested in acquiring NorthStar Realty Finance Corp., people with knowledge of the matter said.
American Realty (Nasdaq: ARCP) is weighing an offer of about $20 a share, one of the people said, asking not to be identified discussing confidential information. That’s a premium of 25 percent to NorthStar’s (NYSE: NRF) closing price of $16.03 last week and would value the New York-based company at about $6.5 billion.
There’s no guarantee that an agreement will be reached, one of the people said. NorthStar rose 7.9 percent to $17.29 at 12:44 p.m. in New York. American Realty, based in New York, fell 2.3 percent to $12.71. The talks were reported earlier Monday by the Financial Times.
American Realty, led by Nicholas Schorsch, has used acquisitions to grow from a $67 million company when it began trading in 2011 to a national U.S. landlord with a market value of almost $10 billion. The real estate investment trust’s purchase of Cole Real Estate Investments Inc. in February for about $9.85 billion, including debt, made it the biggest owner of single-tenant buildings leased to businesses such as drugstores and fast-food restaurants.
A purchase of NorthStar would add to American Realty’s nontraded REIT fundraising and management business, which it acquired with its purchase of Cole.
NorthStar also owns single-tenant real estate, manufactured housing and health-care buildings. NorthStar said in December it would spin off its asset-management unit into a new publicly traded company. It has also been building its health care real estate business, bringing in former HCP Inc. Chief Executive Officer Jay Flaherty as a partner and agreeing in March to acquire a $1.05 billion portfolio of senior-housing and nursing facilities.
Matt Goldstein, a spokesman for American Realty, declined to comment. Joe Calabrese, a spokesman for NorthStar, didn’t reply to two calls seeking a comment.