Wednesday, September 27, 2023

Orange Capital Announces Intention to Vote Against the Merger of Global Net Lease, Inc. and Necessity Retail REIT

NEW YORK, June 15, 2023 /PRNewswire/ — Orange Capital Ventures, LP (“Orange Capital”), a New York-based investment firm, today announced its intention to vote against the proposed merger (the “Merger”) of Global Net Lease, Inc. (NYSE: GNL) (“GNL” or the “Company”) and Necessity Retail REIT (Nasdaq: RTL)(“RTL”). Orange Capital delivered a letter to the Company’s Board of Directors on June 6th, 2023 highlighting its opposition to the transaction.


  • THE MERGER IS VALUE DESTRUCTIVE: We believe there are far better value creating alternatives available to the GNL board and Company shareholders than the RTL Merger. For example, we estimate that a standalone internalization plan for GNL would likely yield a GNL price closer to $22 per share (12x pro-forma AFFO, +109% from the last close). We believe the Merger has little industrial logic and is a complete reversal of management’s strategy to avoid retail exposure. The Merger presentation conspicuously lacks any comparable analysis of industrial vs. retail REITs. Importantly, the Merger is subject to a shareholder vote and will likely be reviewed by proxy advisory firms.

  • The effect of the Merger will cut GNL’s dividend and resulted in the Company’s credit ratings being put on negative watch by Fitch.

  • THE MERGER IS DESIGNED TO ENRICH AR GLOBAL: We estimate a staggering $375 million of value is being transferred to AR Global as compensation for internalization of the REIT under the proposed Merger, with AR Global receiving estimated annual dividends of $42 million. This number skyrockets to an estimated $547 million, 8.4x annual GNL-RTL advisory fees, should GNL ever reach 10x pro-forma AFFO per share. AR Global is only entitled to 2.5x annual advisory fees if there is a change of control at GNL.

  • Blackwells, having previously called the Merger “cockamamie” and full of “ransom payments” to AR Global, will now receive $23 million in shares if the Merger closes. We believe GNL’s apparent willingness to buy shareholder support clearly resembles a greenmail payment and is an indictment of how corrupt this Merger is. We believe Blackwells obliterated all its credibility with shareholders by abruptly retreating from its previous position as part of a “Cooperation Agreement” that compensates them an estimated $23 million worth of GNL stock (2.095 million GNL shares) for their support. Blackwells’ most recent presentation in support of the merger fails to highlight this devastating conflict of interest. The Cooperation Agreement makes the Merger more dilutive for GNL shareholders while effectively reducing Blackwells’ cost basis by approximately $5.50 per share, a 50% discount to GNL’s unaffected stock price of $10.97.

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The full text of the letter can be found here.

About Orange Capital

Orange Capital Ventures GP, LP is a New York based investment manager in private and public equity and debt. Orange Capital LLC was founded in 2004 by Mr. Daniel Lewis, who serves as Managing Partner.

Forward-Looking Statements

This release contains a number of forward-looking statements. Words such as “plan,” “believe,” “anticipate,” “reflect,” “invest,” “see,” “make,” “expect,” “deliver,” “drive,” “improve,” “intend,” “assess,” “remain,” “evaluate,” “establish,” “focus,” “build,” “turn,” “expand,” “leverage,” “grow,” “will,” and variations of such words and similar future or conditional expressions are intended to identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements regarding Orange Capital’s, GNL’s, RTL’s or AR Global’s plans, impacts of accounting standards and guidance, growth, legal matters, taxes, costs and cost savings, impairments, dividends, expectations, investments, innovations, opportunities, capabilities, execution, initiatives, and pipeline. These forward-looking statements reflect management’s current expectations and are not guarantees of future performance and are subject to a number of risks and uncertainties, many of which are difficult to predict and beyond the Issuer’s control. Orange Capital disclaims and does not undertake any obligation to update, revise, or withdraw any forward-looking statement in this press release, except as required by applicable law or regulation.

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Investor Contacts:
Daniel Lewis, Orange Capital
Walied Soliman, Norton Rose Fulbright LLP
[email protected]

Media Contacts 
ASC Advisors
Taylor Ingraham / Steve Bruce
[email protected] / [email protected]
203 992 1230

SOURCE Orange Capital Ventures, LP

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