A basic point that I would make about the share increase is that it does not cause NAV dilution. Also, the way I run the numbers there is not any net income or Operating Cash Flow dilution either.
The negative lies in the fact that with increased shares outstanding it will be more challenging to increase net income and Free Cash Flow per in the future. This is the reason that I would not buy the stock or would sell it if I was so inclined.
Disclosure: using Yahoo numbers and hurrying through lunch! Having had my lunch eaten before breakfast by this deal I continue to HOLD the shares with no further action anticipated.
68,560,000 shares 3,250,000 shares x 18.90=61,425,000 x 5% expense 71,810,000 shares 58,353,750 proceeds
58,353,750 proceeds x7.875% = 4,595,358 savings
Last 4qtrs net income 59,532,000 or .868 adj. for transaction 64,127,000 or .893
Last 4q Operating Cash Flow 1.53 adj. for transaction 1.53
NAV before transaction 12.66 after transaction 12.90 +.24 or 1.90%
Mcapmco - thanks for running the numbers. . .I was "pre-coffee" this morning California time when I did my estimates. Agree - this is neither overpriced or underpriced stock at the moment, so a HOLD is in order. Long term, demographics still look good for assisted living/nursing homes.