Business Context and Reporting Period
This Form 8-K is filed by American Realty Capital New York City REIT, Inc. (the "Company") on June 15, 2018. The filing addresses the commencement of two competing tender offers for the Company's common stock: an unsolicited offer by MacKenzie Realty Capital, Inc. ("MacKenzie") and a defensive self-tender offer initiated by the Company.
Key Financial Metrics and Offer Terms
- MacKenzie Offer Price: $12.04 per share in cash.
- Company Self-Tender Offer Price: $12.95 per share in cash (a 7.6% premium to the MacKenzie Offer).
- Offer Size: Both offers seek to purchase up to 500,000 shares.
- Estimated Net Asset Value (NAV): $20.26 per share (as of June 30, 2017, approved October 25, 2017).
- Discount to NAV: The MacKenzie Offer is 41% below the Estimated Per-Share NAV. The Company Offer is also significantly below the Estimated Per-Share NAV.
- Liquidity: The filing notes there is no trading market for the Shares, creating illiquidity concerns.
Material Changes and Events
- Unsolicited Tender Offer: On June 4, 2018, MacKenzie commenced an unsolicited offer to purchase shares at $12.04, expiring July 20, 2018.
- Defensive Self-Tender Offer: On June 15, 2018, the Company commenced its own offer at $12.95 to deter bidders exploiting illiquidity, expiring July 24, 2018.
- Share Repurchase Program (SRP) Suspension: The Board has suspended the Company's existing SRP. No repurchase requests will be accepted during the Company Offer or for 10 business days thereafter.
Management Commentary, Risks, and Outlook
The Board of Directors believes both the MacKenzie Offer and the Company Offer are not in the best interests of stockholders because the offer prices are substantially below the Estimated Per-Share NAV. Consequently, the Board recommends that stockholders DO NOT tender their shares in either offer.
Risks and Contingencies:
- Board Discretion: The Board retains the right to amend, suspend, or terminate the Company Offer and the SRP at any time.
- Future Distributions: The Board makes no assurances regarding future distributions or the timing of liquidity provision.
- Forward-Looking Statements: The filing contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from expectations.
Investor Verification Checklist
- Verify the current Estimated Per-Share NAV, as the $20.26 figure cited is from June 30, 2017.
- Review the Offer to Purchase and Letter of Transmittal filed on Schedule TO for detailed terms and conditions.
- Confirm the expiration dates: July 20, 2018 (MacKenzie) and July 24, 2018 (Company).
- Assess individual liquidity needs given the lack of a trading market for the shares.
- Monitor for potential amendments or terminations of the Company Offer by the Board.