A deal with real estate firm AR Capital that would have doubled alternative investment firm Apollo Global Management’s real estate assets under management to $27 billion was terminated, a joint news release said.
Charles Zehren, Apollo spokesman, declined to comment. But sources said that certain prerequisites had not been met, coming amid financial challenges at AR Capital.
In August, Apollo Global Management and retail real estate investment firm AR Capital announced a deal in which Apollo would acquire a majority interest in a new business, AR Global Investments, which would in turn own a majority of AR Capital assets.
At the same time, Apollo Global Management is modifying a separate deal to acquire RCS Capital’s wholesale distribution business for $6 million in cash, subject to certain purchase price adjustments, said Jonathan Keehner, RCS spokesman. Under the original agreement, Apollo was to pay $25 million in cash for RCS Capital’s wholesale business. RCS Capital’s stock price has been falling since August when both deals were announced. Sources said this was one of the factors leading to the lower sales price for RCS Capital’s wholesale business and the termination of the AR Capital acquisition.
Apollo is partnering in the transaction with the RCS wholesale management team led by Bill Dwyer and Louisa Quarto. The deal would give Apollo a way to market its investment products to the retail sector.
The Apollo Global Management-RCS Capital deal is expected to close in the first quarter of 2016.
Eric Kuo, Apollo spokesman, declined to comment.