GLOBAL NET LEASE, INC. FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Material Modification to Rights of Security Holders, Change in Directors or Principal Officers, Financial Statements and Exhibits
Item 1.01 Entry into a Material Definitive Agreement.
Agreement and Plan of Merger
On
"Company"),
partnership ("GNL OP"),
("RTL"),
limited partnership ("RTL OP"),
company and wholly-owned subsidiary of GNL ("REIT Merger Sub"), and
II, LLC
OP ("OP Merger Sub"), entered into an Agreement and Plan of Merger (the "Merger
Agreement"). Subject to the terms and conditions of the Merger Agreement, at the
effective time of the merger (the "REIT Merger Effective Time"), RTL will merge
with and into REIT Merger Sub, with REIT Merger Sub continuing as the surviving
entity and a wholly-owned subsidiary of GNL (the "REIT Merger"), and OP Merger
Sub will merge with and into RTL OP, with RTL OP continuing as the surviving
entity (the "OP Merger" and, together with the REIT Merger, the "Merger"). The
Company also entered into an agreement to internalize the advisory and property
management functions of the combined companies through a series of mergers with
the advisors and property managers for each of GNL and RTL known as an
"Internalization."
The Merger Agreement, including the Exchange Ratio (as defined below), resulted
from negotiations between a special committee (the "GNL Special Committee") of
independent members of the Board of Directors of GNL (the "GNL Board") and a
special committee (the "RTL Special Committee") of independent members of the
Board of Directors of RTL (the "RTL Board"), with the assistance of separate and
independent financial and legal advisors. On
Committee unanimously recommended, and the GNL Board (with the unanimous vote of
the independent directors) on behalf of GNL approved, the Merger Agreement, the
Merger, the Internalization Agreement (as defined below), the Internalization
and the other transactions contemplated by each agreement, except that Governor
voting. On
the RTL Board (with the unanimous vote of the independent directors) on behalf
of RTL approved, the Merger Agreement, the Merger, the Internalization
Agreement, the Internalization and the other transactions contemplated by each
agreement, except that Governor
Board, recused himself from voting.
Upon the closing of the Merger, GNL will increase the size of the GNL Board by
three directors. Three independent directors of RTL will be appointed to the GNL
Board, and those appointees will be placed into the directorship classes of GNL
that correspond to their respective classes on the RTL Board so that the
composition of the GNL Board as of the REIT Merger Effective Time is intended to
be
year of their terms as directors and whose terms will expire at the first GNL
annual meeting of stockholders after the REIT Merger Effective Time;
Rendell
expire at the 2024 GNL annual meeting of stockholders; and
stockholders.
Pursuant to the Registration Rights and Stockholder Agreement (as defined and
discussed below) that
liability company (the "Advisor Parent") intend to enter into at the closing of
the Merger, Advisor Parent, as a stockholder of GNL, will have certain board
designation rights, subject to certain ownership requirements.
The Merger
At the REIT Merger Effective Time, each issued and outstanding share of RTL's
Class A Common Stock, par value
fraction thereof), will be converted into the right to receive 0.670 shares (the
"Exchange Ratio") of validly issued, fully paid and nonassessable shares of
GNL's Common Stock, par value
after the REIT Merger Effective Time, all shares of RTL Class A Common Stock
will no longer be outstanding and will automatically be cancelled and cease to
exist, and each holder of a share of RTL Class A Common Stock will cease to have
any rights with respect thereto, except for the right to receive the
consideration as provided in the Merger Agreement.
At the REIT Merger Effective Time, each issued and outstanding share of RTL's
7.50% Series A Cumulative Redeemable Perpetual Preferred Stock, par value
per share ("RTL Series A Preferred Stock") and each issued and outstanding share
of RTL's 7.375% Series C Cumulative Redeemable Perpetual Preferred Stock, par
value
converted into the right to receive from GNL one share of newly created 7.50%
Series D Cumulative Redeemable Perpetual Preferred Stock, par value
share, and one share of newly created 7.375% Series E Cumulative Redeemable
Perpetual Preferred Stock, par value
have substantially identical powers, preferences, privileges, and rights as the
RTL Series A Preferred Stock and the RTL Series C Preferred Stock, respectively.
From and after the REIT Merger Effective Time, all shares of RTL Series A
Preferred Stock and RTL Series C Preferred Stock will no longer be outstanding
and will automatically be cancelled and cease to exist, and each holder of a
share of RTL Series A Preferred Stock and RTL Series C Preferred Stock will
cease to have any rights with respect thereto, except for the right to receive
the consideration as provided in the Merger Agreement.
Following the REIT Merger Effective Time and prior to the OP Merger, REIT Merger
Sub will distribute its general partnership interests in RTL OP to GNL. GNL, in
turn, will contribute such general partnership interest to GNL OP and, in turn,
GNL OP will contribute onward such general partnership interests to a newly
formed limited liability company that will be wholly owned by GNL OP ("
LLC
by virtue of the OP Merger and without any further action on the part of GNL OP,
(i)
respect to the OP Merger; (ii) all the preferred units of RTL OP (the "RTL OP
Preferred Units") held by REIT Merger Sub immediately after the REIT Merger
Effective Time will be cancelled and no payment will be made with respect
thereto; (iii) GNL OP will continue as the sole limited partner of RTL OP; and
(iv) each GNL OP Unit held by a limited partner of RTL OP other than RTL or any
subsidiary of RTL issued and outstanding immediately prior to the OP Merger
Effective Time will automatically be converted into New GNL OP Units in an
amount equal to (x) one (1), multiplied by (y) the Exchange Ratio, and each
. . .
Item 3.03 Material Modification to the Rights of Security Holders.
The information set forth in Item 1.01 of this Current Report on Form 8-K with
respect to the Certificate of Notice is incorporated by reference into this Item
3.03.
The summary of the material terms of the Certificate of Notice described above
does not purport to be complete and is subject to, and qualified in its entirety
by reference to, the Certificate of Notice which is attached as Exhibit 4.1 to
this Current Report on Form 8-K and incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The information set forth in Item 1.01 of this Current Report on Form 8-K with
respect to the RTL Restricted Shares, the GNL Restricted Shares, the RTL LTIP
Units (and Converted RTL Restricted Shares), and GNL LTIP Units (and GNL
Restricted Shares), the increase in size of the GNL Board by three directors and
other changes to the RTL Board, the Weil Employment Agreement and the Nelson
Employment Agreement, each to be effective at the REIT Merger Effective Time, is
incorporated by reference into this Item 5.02.
About
trust listed on the
global portfolio of commercial properties, with an emphasis on sale-leaseback
transactions involving single tenant, mission critical income producing
net-leased assets across
Additional information about GNL can be found on its website at
www.globalnetlease.com.
Forward-Looking Statements
The statements in this communication 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 the Merger and the Internalization as described in this
communication, as well as the potential success that GNL may have in executing
the Merger and Internalization, 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 Merger and the Internalization, to differ materially from those
contemplated by such forward-looking statements, including but not limited to:
(i) GNL's and RTL's ability to complete the proposed Merger and Internalization
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 Merger Agreement relating to the proposed
transactions, (iii) ability of GNL to obtain lender consent to amend its Second
Amended and Restated Credit Facility or any other GNL loan agreement (including
any RTL debt obligations assumed in connection with the Merger), 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 and RTL'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 the
including the uncertainty of expected future financial performance and results
of
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 the 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 RTL's common stock and to GNL's common
stock prior to the closing of the Merger, including the risks related to the
market value of GNL's 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 the COVID-19, on GNL, GNL's tenants and the
global economy and financial market, 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
on
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 GNL 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 and Where to Find It
In connection with the proposed transactions, GNL intends to file with the
registration statement on Form S-4, which will include 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
ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT
DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTIONS. A definitive
joint proxy statement/prospectus will be sent to GNL's stockholders and RTL's
stockholders. Investors and securityholders may obtain a free copy of the joint
proxy statement/prospectus (if and when it becomes available) and other relevant
documents filed by GNL and RTL with the
Copies of the documents filed by GNL with the
charge on GNL's website at www.globalnetlease.com or by contacting GNL's
Investor Relations at [email protected]. Copies of the
documents filed by RTL with the
website at www.necessityretailreit.com or by contacting RTL's Investor Relations
at [email protected].
Participants in the Proxy Solicitation
GNL, RTL, GNL OP, RTL OP, Advisor Parent, GNL Advisor and RTL Advisor, and their
respective directors, executive officers and other members of management and
employees 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 the GNL proxy statement for its 2023 Annual
Meeting, which was filed with the
directors and executive officers of RTL is available in the RTL proxy statement
for its 2023 Annual Meeting, which was filed with the
Other information regarding the participants in the proxy solicitation and a
description of their direct and indirect interests, by security holdings or
otherwise, will be contained in the joint proxy statement/prospectus and other
relevant materials filed with the
they become available. Investors should read the joint proxy
statement/prospectus carefully when it becomes available before making any
voting or investment decisions. Investors may obtain free copies of these
documents from GNL and RTL as indicated above.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits Exhibit No. Description 2.1* Agreement and Plan of Merger, dated as ofMay 23, 2023 , by and amongGlobal Net Lease, Inc. ,Global Net Lease Operating Partnership, L.P. ,Osmosis Sub I, LLC ,Osmosis Sub II, LLC , The Necessity Retail REIT, Inc., andThe Necessity Retail REIT Operating Partnership, L.P. 2.2* Internalization Agreement, dated as ofMay 23, 2023 , by and among GNLAdvisor Merger Sub LLC ,GNL PM Merger Sub LLC ,RTL Advisor Merger Sub LLC ,RTL PM Merger Sub LLC ,Global Net Lease, Inc. ,Global Net Lease Operating Partnership, L.P. , theNecessity Retail REIT, Inc. ,The Necessity Retail REIT Operating, L.P. , on the one hand, andAR Global Investments, LLC ,Global Net Lease Special Limited Partnership, LLC , Necessity Retail Space Limited Partner, LLC,Global Net Leaser Advisors, LLC ,Global Net Lease Properties, LLC ,Necessity Retail Advisors, LLC ,Necessity Retail Properties, LLC , on the other hand. 4.1 Certificate of Notice. 10.1 Non-Competition Agreement, dated as ofMay 23, 2023 and to become effective at the Merger Effective Time, by and amongGlobal Net Lease, Inc. andEdward M. Weil , Jr. 10.2 Non-Competition Agreement, dated as ofMay 23, 2023 and to become effective at the Merger Effective Time, by and amongGlobal Net Lease, Inc. andNicholas Schorsch . 10.3 Employment Agreement, dated as ofMay 23, 2023 and to become effective at the Merger Effective Time, by and betweenGlobal Net Lease, Inc. andEdward M. Weil , Jr. 104 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL Document. ___________________________
* The Company has omitted certain schedules and exhibits pursuant to Item
601(b)(2) of Regulation S-K and shall furnish supplementally to the
of any of the omitted schedules and exhibits upon request by the
PCB BANCORP FILES (8-K) Disclosing Submission of Matters to a Vote of Security Holders
Material Agreement – Form 8-K
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