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Colonial Properties Trust Message Board

  • longshot59426 longshot59426 Dec 7, 2004 9:07 AM Flag

    Dilution

    I was trying to figure out what effect the merger would have on shares outstanding, and it isn't pretty.

    According to CLP's 10-Q, they have roughly 33 million common shares outstanding, and (if memory serves) they will issue between 11 and 14 million more common shares as a result of the merger. Shares outstansing increasing by 33%? OUCH!

    I was thinking about getting into CLP (I have been familiar with this company for about 7 years), but I think I will wait 'til after the deal goes through.

    Am I missing something here?

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    • Although the stock price is a bit too high for me. I enjoy watching the stock because the people on the Board and senior management are solid people. You'll be hard pressed to find a better group of people. However, I do believe that the outcome of the merger is still an unknown and I don't think we'll find out until its finished.

    • There is no dilution. This deal is accretive to CLP. CLP is paying $2.68 divvy per year. The merger is 4 shs TCR for each shr of CLP. TCR is paying .80 per year X 4= $3.20 @ 4 to 1. TCR shareholders will lose .52cts per year and CLP will gain .52cts per year. This is a great deal for CLP and a bad Deal for TCR shareholders of which I am one and I will vote against this merger as will many other TCR shareholders.