|
| Filed by Global Net Lease, Inc.
Pursuant to Rule 425 Under the Securities Act of 1933
And Deemed Filed Pursuant to Rule 14a-12
Under the Securities Exchange Act of 1934
Subject Company: The Necessity Retail REIT, Inc.
Subject Company Commissions File No.: 001-38597 |
FOR IMMEDIATE RELEASE
GLOBAL NET LEASE TO HOST
CONFERENCE CALL AND Q&A
TO DISCUSS BENEFITS OF MERGER AND INTERNALIZATION TRANSACTION
ISS Acknowledges Error in
Their Original Analysis; Issues Corrected Report on the GNL Merger and Internalization
NEW YORK, September 5, 2023 – Global
Net Lease, Inc. (NYSE: GNL) ("Global Net Lease", "GNL" or the “Company”) announced today that it will
host a conference call and webcast on Tuesday, September 5, 2023, at 2:30pm ET to discuss the benefits and industrial logic of the proposed
merger between GNL and The Necessity Retail REIT, Inc. (NASDAQ: RTL) (“Necessity Retail REIT” or “RTL”) and the
immediate internalization of both GNL’s and RTL’s current advisory and property management functions as a part of the proposed
transaction. The Company will also address ISS’s recent GNL report and its admitted error and associated misstatements in its original
analysis of the transaction. ISS’s corrected report now acknowledges that the internalization consideration is in fact within
the range of values observed in precedent internalization transactions, which was utilized to evaluate the fairness of the transaction,
consistent with the disclosures found in GNL’s and RTL’s joint proxy statement.
The Company will welcome questions from analysts
and shareholders. The proposed merger is the appropriate path to achieve great success for the following reasons:
| · | Enhanced Corporate Governance: Enhanced governance attributes, including the elimination of the
shareholder rights plan, is expected to put GNL on par with its publicly traded net lease REIT peers. |
| · | Internalization of Advisory and Property Management Contracts: Both GNL’s and RTL’s
external advisory and property management agreements will be internalized in connection with the proposed transaction. ISS’s report
fails to contemplate that the transaction involves the internalization of the GNL advisor, GNL property manager, RTL advisor and RTL property
manager. |
| · | AFFO Accretion: The proposed transaction is expected to improve the combined company’s AFFO
payout ratio and be 9% accretive to annualized AFFO per share in the first quarter after closing, when compared to Q1'23. |
| · | Increased Size and Scale: The combined company is expected to create the third-largest listed net
lease REIT with a global presence, increased scale, and more balanced sector exposures. |
| · | Reduced Leverage: As a result of the proposed transaction, GNL is expected to feature reduced net
debt to annualized adjusted EBITDA as it strives to achieve an investment grade rating over time. |
| · | Overall Benefit: The combined company, with its increased size, reduced leverage, increased earnings
and enhanced governance provides an opportunity to benefit from a trading multiple expansion as it trades in line with its peers. |
ISS acknowledged a critical error in its GNL
report. We urge shareholders to read the revised report that ISS issued at 10pm this past Friday. The revised ISS report states1,
“ISS's fairness opinion summary table erred” when it compared the full cash and stock internalization consideration from
both the GNL and RTL transaction to the results of BMO's selected precedent internalization transactions analysis. In fact, as ISS concedes,
the consideration is within the range of values observed in precedent internalization transactions utilized by BMO. Because ISS continues
to err in its analysis by comparing the aggregate internalization consideration from both the GNL and RTL transactions against the consideration
to be paid by GNL only, the Company strongly disagrees with ISS's analysis and recommendation, and look forward to discussing the benefits
of the merger and internalization with our stakeholders directly. The special committees of both the Boards of GNL and RTL maintain that
this transaction is in the best interest of their respective stockholders.
The Board of Directors recommends that GNL
stockholders vote “FOR” each of the proposals to be considered at the GNL special meeting due to these overwhelming benefits
and industrial logic of the proposed merger and internalization.
The conference call will be followed by a Q&A
session. The call will be hosted by Sue Perrotty, Non-Executive Chairperson of GNL’s Board of Directors, and Michael Weil, incoming
co-CEO of GNL.
Investors can access the presentation that was
recently filed with the Securities and Exchange Commission at the following link on GNL’s website.
Dial-in instructions for the conference call and
the replay are outlined below.
Conference Call Details
Live Call
Dial-In (Toll Free): 1-877-407-0792
International Dial-In: 1-201-689-8263
1 Permission to use quotations
neither sought nor obtained.
For those who are not able to listen to the live
broadcast, a replay will be available shortly after the call on the GNL website in the investors section at www.globalnetlease.com.
Conference Replay
Domestic Dial-In (Toll Free): 1-844-512-2921
International Dial-In: 1-412-317-6671
Conference Number: 13741026
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, INCLUDING THE FAIRNESS OPINIONS RENDERED BY BMO CAPITAL MARKETS, 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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