We are subject to risks associated with proxy contests and other actions of activist stockholders.
If a tenant or lease guarantor declares bankruptcy or becomes insolvent, we may be unable to collect balances due under relevant leases.
The Exchange Ratio is fixed and will not be adjusted in the event of any change in the relative values of the shares of our Class A Common Stock or GNL Common Stock.
The REIT Merger and Internalization Merger are both subject to a number of conditions, and if these conditions are not satisfied or waived, the Proposed Transactions will not be completed, which could result in the requirement that we pay certain termination fees or, in certain circumstances, that we pay expenses to GNL.
Failure to complete the Proposed Transactions could negatively impact our stock price and our future business and financial results.
Holders of Class A Common Stock will have a reduced ownership and voting interest in the Combined Company after the Proposed Transactions and will exercise less influence over management of the Combined Company.
The Merger Agreements contain provisions that could discourage a potential competing acquiror or could result in any competing proposal being at a lower price than it might otherwise be.
There may be unexpected delays in completing either of the Proposed Transactions.
Some of our directors and executive officers have interests in the REIT Merger that are different from, or in addition to, those of our other stockholders.
An adverse outcome in any litigation or other legal proceedings relating to the REIT Merger Agreement, the Internalization Merger Agreement, or the transactions contemplated thereby, could have a material adverse impact on our businesses or our ability to consummate the transactions contemplated by the REIT Merger Agreement and Internalization Merger Agreement.
The opinions of our and GNL’s financial advisors will not reflect changes in circumstances between the date of the opinions and completion of the Proposed Transactions.
The Internalization Merger was negotiated between the RTL Special Committee and the GNL Special Committee on the one hand (each of which being comprised solely of independent and disinterested members of our and GNL’s boards of directors, respectively) and AR Global on the other hand, which is affiliated with certain of our and GNL’s officers and directors.
There can be no assurance that we could become “internalized” or “self-managed” without the Internalization Merger.
The representations, warranties, covenants and indemnities in each of the REIT Merger Agreement and Internalization Merger Agreement are subject to limitations and qualifiers, which may limit our ability to enforce any remedy under these agreements.
The pendency of the REIT Merger and the Internalization Merger could adversely affect our business and operations.
The Combined Company expects to incur substantial expenses related to the Proposed Transactions.
Following the Proposed Transactions, GNL may be unable to integrate our operations and operations of the Acquired Entities successfully and may not realize the anticipated synergies and other benefits of the Proposed Transactions or do so within the anticipated time frame.
The Combined Company’s net income, FFO and AFFO may decrease in the near term as a result of the Proposed Transactions.
Counterparties to certain of our debt agreements may exercise contractual rights under such agreements in connection with the REIT Merger.
Future sales of GNL Common Stock, by AR Global or its affiliates or the Blackwells/Related Parties or other stockholders, may adversely affect the market price of GNL Common Stock.
The occurrence of a Ratings Decline in connection with the Proposed Transactions may require the Combined Company to redeem the Senior Notes under the indenture governing the Senior Notes, and the Combined Company may not have the funds necessary to finance such a redemption.
The historical and unaudited pro forma combined financial information included in the Joint Proxy Statement/Prospectus may not be representative of our results following the Proposed Transactions.
Because the Combined Company’s board of directors will not be fully declassified until 2025, the classified board may have the effect of delaying, deferring, or preventing a change of control of the Combined Company until then.
The Beneficial Ownership Limit may discourage a third party from acquiring the Combined Company in a manner that might result in a premium price to our stockholders
We operate in two reportable business segments for management and internal financial reporting purposes. In our single-tenant operating segment, we own, manage and lease single-tenant properties where tenants are required to pay for property operating expenses, which may be subject to expense exclusions and floors, in addition to base rent. In our multi-tenant operating segment, we own, manage and lease multi-tenant properties where we generally pay for the property operating expenses for those properties and most of our tenants are required to pay their pro rata share of property operating expenses.
As more fully discussed in Note 1 — Organization to our consolidated financial statements included in this Quarterly Report on Form 10-Q, during the year ended December 31, 2022, we completed the CIM Portfolio Acquisition and other property acquisitions which significantly affected and will continue to affect the comparable results from operations until they have been held for all periods presented. Accordingly, we discuss financial results on a same-store basis (details below) and the related impacts of acquisitions and dispositions.
Upon the approval and closing of the Proposed Transactions, the Combined Company will no longer pay asset management fees to our Advisor or fees to our Property Manager and we will internalize our management. Although the Combined Company will no longer effectively bear the costs of the various fees, expense reimbursements and equity compensation under the OPP Plan previously paid to our Advisor, our Property Manager, the GNL Advisor and the GNL Property Manager after the Internalization Merger, the Combined Company’s general and administrative expenses will include the compensation and benefits of our officers, employees, and consultants, as well as overhead expenses, previously paid by those entities in managing ours and GNL’s business and operations. There is no assurance that these expenses will be less than the fees we and GNL currently pay to the Advisor, Property Manager, GNL Advisor and GNL Property Manager for their services. Please see “Risk Factors—Risks Related to the Proposed Transactions—The Combined Company’s net income, FFO and AFFO may decrease in the near term as a result of the Proposed Transactions” below and Note 1 — Organization —Proposed Merger and Internalization to our consolidated financial statements included in this Quarterly Report on Form 10-Q for additional details.
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