Highlights Efficiencies, Scale and Significant
Governance Overhauls
Nominated Directors of GNL and RTL Were
Re-Elected by Shareholders Following the Merger Announcement with
85% GNL Shareholder Participation and 75% RTL Shareholder
Participation in 2023 Annual Meeting
Boards Recommend Stockholders to Vote "FOR"
proposals at Special Meetings on September
8, 2023
NEW
YORK, Aug. 28, 2023 /PRNewswire/ -- Global Net
Lease Inc. (NYSE: GNL) ("Global Net Lease" or "GNL") and The
Necessity Retail REIT Inc. (NASDAQ: RTL) ("Necessity Retail REIT"
or "RTL") today released an investor presentation highlighting the
significant benefits of the proposed merger between GNL and RTL,
and the ensuing elimination of their respective external management
agreements.
The presentation has been filed with the Securities and Exchange
Commission and is available in the investor relations sections of
GNL's and RTL's websites.
As announced on May 23, 2023, the
merger between GNL and RTL is expected to create the third-largest
listed net lease REIT with a global presence, increased footprint
and more balanced sector exposures. The combined company ("GNL
post-closing") will be internally managed (including all property
management functions) and, importantly, will have enhanced
governance attributes which put GNL on par with leading governance
structures of publicly traded REITs.
"This merger gives current and prospective shareholders a unique
opportunity to realize value by owning one of the largest net lease
REITs that has the potential to benefit from trading multiple
expansion, given that internally managed, large scale and
diversified net lease REITs trade at significantly higher multiples
than either GNL or RTL trade at currently," said Michael Weil, CEO of RTL and James Nelson, CEO of GNL.
"A fulsome process was conducted to take into account
shareholder opinions and concerns, resulting in what we believe is
a best in class governance platform that will oversee the merged
companies. We are grateful for the majority votes in favor of our
directors at both GNL and RTL following the merger announcement and
view that support as a validation of our strategy." Specific
benefits highlighted include:
- Substantial Cost Savings: It is anticipated that the
merger will result in annual cost savings of approximately
$54 million realized immediately at
closing from the internalization, and approximately $21 million within one year.
- Reduced Debt: GNL post-closing's net debt to annualized
adjusted EBITDA is expected to be reduced from 8.3x at the end of
Q2 2023 to an estimated 7.6x at the end of Q4 2023 as a result of
the merger. We expect the merger will allow us to further reduce
debt over time as we strive to achieve an investment grade
rating.
- Corporate Government Enhancements: GNL post-closing will
have a majority-independent, declassified Board of Directors.
Internalizing management will result in the elimination of all
management fees, coupled with seamless integration and no social
issues. GNL will also terminate its Stockholder Rights Plan
(commonly referred to as a "poison pill") in connection with the
merger.
- Enhanced Portfolio: GNL post-closing will achieve
greater diversity by geography, asset type, tenant, and industry,
which we expect to provide increased stability in an ever-changing
commercial real estate landscape.
- Positioned for Growth: GNL post-closing is expected to
have broadened acquisition capabilities and a larger asset base
that will enable greater balance sheet flexibility and the ability
to grow and optimize its portfolio.
The GNL and RTL Boards of Directors unanimously recommend
that GNL and RTL stockholders vote "FOR" each of the proposals to
be considered at the upcoming Special Meetings of Stockholders,
which are scheduled be held on September
8, 2023.
The transaction is expected to close in September 2023, subject to the respective
approvals by the stockholders of GNL and RTL, and other customary
closing conditions set forth in the merger agreement.
About Global Net Lease, Inc.
Global Net Lease, Inc. is a publicly traded real estate
investment trust listed on the NYSE, which focuses on acquiring a
diversified global portfolio of commercial properties, with an
emphasis on sale-leaseback transactions involving single tenant,
mission critical income producing net-leased assets across
the United States, Western, and
Northern Europe.
About The Necessity Retail REIT, Inc.
The Necessity Retail REIT, Inc. is the preeminent publicly
traded real estate investment trust focused on "Where America
Shops", which acquires and manages a diversified portfolio of
necessity-based retail single tenant and open-air shopping center
properties in the U.S.
Forward-Looking Statements
The statements in this press release that are not historical
facts may be forward-looking statements. These forward-looking
statements involve risks and uncertainties that could cause actual
results or events to be materially different. In addition, words
such as "may," "will," "seeks," "anticipates," "believes,"
"estimates," expects," "plans," "intends," "would," or similar
expressions indicate a forward-looking statement, although not all
forward-looking statements contain these identifying words. Any
statements referring to the future value of an investment in GNL,
including the adjustments giving effect to RTL merging with and
into Osmosis Sub I, LLC, with Osmosis Sub I, LLC continuing as the
surviving entity and wholly-owned subsidiary of GNL (the "REIT
Merger") and GNL and RTL becoming internally managed (the
"Internalization Merger" and, together with the REIT Merger, the
"Proposed Transactions") as described in this press release, as
well as the potential success that GNL may have in executing the
REIT Merger and Internalization Merger, are also forward-looking
statements. There are a number of risks, uncertainties and other
important factors that could cause GNL's actual results, or GNL's
actual results after making adjustments to give effect to the REIT
Merger and the Internalization Merger, to differ materially from
those contemplated by such forward-looking statements, including
but not limited to: (i) GNL's ability to complete the proposed REIT
Merger and Internalization Merger on the proposed terms or on the
anticipated timeline, or at all, including risks and uncertainties
related to securing the necessary stockholder approvals and
satisfaction of other closing conditions to consummate the proposed
transaction, (ii) the occurrence of any event, change or other
circumstance that could give rise to the termination of the
Internalization Merger Agreement and REIT Merger Agreement, each
dated as of May 23, 2023 relating to
the Proposed Transactions, (iii) the ability of GNL to obtain
lender consent to amend its Second Amended and Restated Credit
Facility or any other loan agreement of GNL, if at all, or on terms
favorable to GNL, (iv) risks related to the potential repeal of
GNL's Shareholder's Rights Plan; (v) risks related to the decrease
in the beneficial ownership requirements of GNL's applicable
classes and series of stock; (vi) risks related to diverting the
attention of GNL's management from ongoing business operations,
(vii) failure to realize the expected benefits of the Proposed
Transactions, (viii) significant transaction costs or unknown or
inestimable liabilities, (ix) the risk of shareholder litigation in
connection with the proposed transaction, including resulting
expense or delay, (x) the risk that RTL's business will not be
integrated successfully or that such integration may be more
difficult, time-consuming or costly than expected, (xi) risks
related to future opportunities and plans for GNL post-closing,
including the uncertainty of expected future financial performance
and results of GNL post-closing following completion of the
Proposed Transactions, (xii) the effect of the announcement of the
proposed transaction on the ability of GNL and RTL to operate their
respective businesses and retain and hire key personnel and to
maintain favorable business relationships, (xiii) the effect of any
downgrade of GNL's or RTL's corporate rating or to any of their
respective debt or equity securities including the outstanding
notes under the RTL Indenture; (xiv) risks related to the market
value of the GNL Common Stock to be issued in the Proposed
Transactions; (xv) other risks related to the completion of the
Proposed Transactions, (xvi) potential adverse effects of the
ongoing global COVID-19 pandemic, including actions taken to
contain or treat COVID-19, on RTL, RTL's tenants and the global
economy and financial market, (xvii) the risk that one or more
parties to the Internalization Merger Agreement and REIT Merger
Agreement may not fulfil its obligations under the respective
agreement, as well as the additional risks, uncertainties and other
important factors set forth in the "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" sections of GNL's Annual Report on Form 10-K for the
year ended December 31, 2022 filed
with the SEC on February 23, 2023,
and all other filings with the SEC after that date, as such risks,
uncertainties and other important factors may be updated from time
to time in GNL's subsequent reports. Further, forward-looking
statements speak only as of the date they are made, and the Company
undertakes no obligation to update or revise forward-looking
statements to reflect changed assumptions, the occurrence of
unanticipated events or changes to future operating results over
time, except as required by law.
Additional Information About the REIT Merger and
Internalization Merger and Where to Find It
In connection with the Proposed Transactions, on July 6, 2023, GNL filed with the SEC a
registration statement on Form S-4 (as amended on July 17, 2023), which includes a document that
serves as a prospectus of GNL and a joint proxy statement of GNL
and RTL (the "Joint Proxy Statement/Prospectus"). Each party also
plans to file other relevant documents with the SEC regarding the
Proposed Transactions. The Form S-4 became effective on
July 18, 2023. INVESTORS AND SECURITY
HOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND
OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BECAUSE THEY CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTIONS. GNL and RTL
commenced mailing the definitive Joint Proxy Statement/Prospectus
to stockholders on or about July 19,
2023. Investors and securityholders may obtain a free copy
of the Joint Proxy Statement/Prospectus and other relevant
documents filed by GNL and RTL with the SEC at the SEC's website at
www.sec.gov. Copies of the documents filed by GNL with the SEC are
available free of charge on GNL's website at
www.globalnetlease.com or by contacting GNL's Investor
Relations at investorrelations@globalnetlease.com. Copies of the
documents filed by RTL with the SEC are available free of charge on
RTL's website at www.necessityretailreit.com or by contacting
RTL's Investor Relations at ir@rtlreit.com.
Participants in the Proxy Solicitation
GNL, RTL, and their respective directors, executive officers and
other members of management and employees of their respective
advisors and their affiliates may be deemed to be participants in
the solicitation of proxies in respect of the Proposed
Transactions. Information about directors and executive officers of
GNL is available in its proxy statement for its 2023 Annual
Meeting, as incorporated by reference in the Joint Proxy
Statement/Prospectus. Information about directors and executive
officers of RTL is available in its proxy statement for its 2023
Annual Meeting, as incorporated by reference in the Joint Proxy
Statement/Prospectus. Other information regarding the participants
in the proxy solicitation and a description of their direct and
indirect interests, by security holdings or otherwise, is contained
in the joint proxy statement/prospectus and other relevant
materials filed with the SEC regarding the Proposed Transactions.
Investors should read the Joint Proxy Statement/Prospectus
carefully before making any voting or investment decisions.
Investors may obtain free copies of these documents from GNL as
indicated above.
Contacts
Investors and Media:
Email: investorrelations@globalnetlease.com
Phone: (212) 415-6510
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SOURCE The Necessity Retail REIT, Inc.; Global Net Lease,
Inc.