RCS Capital drops deal to buy firm from ARCP

AP News
Posted: Nov 03, 2014 10:07 AM

NEW YORK (AP) — Investment firm RCS Capital Corp. said Monday that it has called off its $700 million deal to buy Cole Capital Partners from the real estate investment trust American Realty Capital Properties Inc.

RCS Capital did not give a reason for dropping the acquisition.

The decision comes a week after American Realty Capital Properties 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.

Shares of both New York companies fell more than 10 percent in morning trading Monday.

RCS Capital and ARCP did not respond to requests for comment.

ARCP owns and operates commercial real estate properties, and 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.

Shares of ARCP fell 91 cents, or 10.3 percent, to $7.96 Monday morning. RCS Capital shares fell $2.20, or 13.4 percent, to $14.21.