NEW YORK, N.Y. – American Realty Capital Properties Inc. is fighting back after investment firm RCS Capital Corp. said Monday that it called off its $700 million deal to buy Cole Capital Partners from the real estate investment trust.
ARCP said in a statement that RCS Capital has “no right” and “no basis” to end the agreement.
RCS Capital did not give a reason for dropping the acquisition. The decision comes a week after ARCP said that key parts of its financial statements were incorrect and its financial results from 2013 and 2014 were not reliable. ARCP has since replaced its chief financial officer and chief accounting officer.
New York-based ARCP, which owns and operates commercial real estate properties, had announced the deal to sell Cole Capital to RCS Capital on Oct. 1. When it disclosed its accounting problems on Oct. 29, ARCP said it didn’t expect the issues to affect the sale of Cole Capital to RCS Capital.
ARCP said it received a letter from RCS Capital about the deal being dropped “in the middle of the night.” ARCP added that RCS Capital violated its agreement and that the company is “evaluating all alternatives under the agreement.”
RCS Capital did not respond to a request for comment.
Shares of ARCP fell 54 cents, or 6.1 per cent, to $8.33 Monday morning. Shares of RCS Capital, based in New York, fell $2.24, or 13.7 per cent, to $14.17.