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HCP, Inc. Message Board

  • susanmarie1900 susanmarie1900 Sep 28, 2006 5:58 PM Flag

    CNL and HCP help me understand please

    Ok, I have 2374.50 shares of CNL stock. (I inherited this and other investments). I do not know the financial world at all. Today I read the largest merger in REIT history and CNL and HCP are merging together. Then the statement below:

    Properties will be converted into the right to receive merger consideration consisting of $11.1293 in cash and .0865 of a share of common stock of Health Care Property Investors.

    Please can someone tell me how this will effect me and my money invested in CNL. At this time I have 2374.50 shares @ $19.00 per share. $45,115.50

    Will my CNL stock turn into HCP stock now? CNL is not publicly traded, but HCP is publicly traded. At least I think this is correct. I have NOT been paying attention to this investment since it was the smallest one in the trust I inherited. So did something good happen for me today, or something bad?

    Please explain in simple layman terms, and I really need the truth. I appreciate anyone that can let me know. I don't know enough about finance to know what is going on here.

    Thank you so much.

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    • You will no longer be a holder of CNL since HCP has merged with them. You will receive $11.12 for each share you hold and .08650 shares of HCP. I,m not sure how you have a value of $19 per share but that could be the inherited value. For everyone it is a very good deal since we have been collecting dividends for many years and still we are getting a premium on our money. You should have received a letter stating your dollars and shares you will receive. I have already received my monies on October 5th. You shold hold your stock in HCP since it pays over 5% dividend. Actually I might consider buying more with the monies I received. Good Luck

    • Susan, Sounds like you perhaps own the actual company stock in CNL. This merger had only to do with the CNL Retirement Properties LP which were purchased as privately held at $10.00 p/shr.and closed this offering in March of '06 after a five year money raise.
      If I might be of further assistance you may email me at:
      Hope this helps

    • SusanMarie: The conversion will take place this week. If your shares of CNL are held in a brokerage account the transactions will take place there. If you do not you will receive a Direct Registration Transaction Advice from Bank of New York. They will hold the shares of HCP common stock. If you have 2,374.50 shares of CNL Retirment Prop. you should receive in cash about $25,426.52 and 205.39 shares of HCP. Depending on how long you have owned the REIT this should be a sweet deal. Your challenge is going to be figuring the basis since these were inherited shares.

    • Why would HCP be going up 5 points in the last few months if the cash flow and subsequently the dividend were not going to rise commensurately?
      Have you noticed the steady trading increase on the plus side. That's in my opinion institutional money. Do they know something that we don't??
      Who says the earnings are not going to be impressive.? If you add the NCL earnings into HCP and take into account a 10-15%dilution that leaves HCP with a ton of cash. NCL was a big producer and payed generous dividends.

    • Yes, FFO is the most important fact for Div payout. However earnings are important in driving the Price of a stock. I have owned several high Div REITs which were loosing money and it effected stock price.

      My motive is to rotate from CPV, which is being bought out, into HCP. If it had not run up $5 in the last few months it would be a no brainier. But with the CNL merger and the lower earnings estimate I don't want to get in at the top. There are many people who set limits on stock ownership depending on PE, payout ratios, earnings momentum, etc

    • Hi

      $19/share sounds like CNL Hotels and Resorts, not CNL Retirement properties.

      Good luck

    • I disagree. HCP is a good stock to own even if you don't know much about it and especially if you don't. It is safer than most and pays a nice yeild. It was wise of him to ask when not sure.

    • CNL Retirement was a privately offered REIT;it was offered at $10. per share; you should have, if this is what you own, been receiving divs quarterly from CNL. CNL sent u material & follow up regarding the merger, and its a done deal; you will get $cash and HCL stock as per the multipliers soon....

    • You should be looking at FFO (Funds From Operations), and not earnings with a REIT. REITs can have very high depreciation on properties that are actually appreciating, hence lowered earnings. Publicly traded REITs usually show more cash paid out than earnings.

      The acquisition of a faster growing portfolio (CNL Retirement) that was throwing off almost 10% per share in FFO should be accretive to HCP going forward.

      If you don't know this basic thing about REIT stocks, then you should not own them. If you did know then you are being dishonest in the deceptive way that you asked the question.

    • You don't actually say which CNL company stock that you own. There is more than one. Based on the $19.00 value that you mentioned, you probably DO NOT own CNL Retirement, but rather CNL Hotel & Resorts, which sells for $20.00/share, and reinvests dividends at a cost of $19.00/share.

      This merger does not affect CNL Hotel & Resorts, that you may own, which by proxy is scheduled to be listed publicly or sold by the end of 2007.

      Shareholders of CNL Retirement purchased shares st $10.00 or less.

      • 2 Replies to jim040558
      • ok. This is the one that I own. I did not realize there were more. It is the Real Estate Investment Trust. Thank you so much for letting me know. The info you just gave me also matches what they told me in the mail with the proxy and voting, etc.

        I thought somehow they had accomplished this early. Not paying attention to this one, and need to do so.

      • I agree she may own one of the other two, but I do not think she owns CNL Retirement Properties.

        My 2004 AMX investment statement list the price as noted below;

        CNL Hotel & Resort (purchased 3/10/04)- $20/share
        CNL Retirement Properties (purchased 3/29/04) - $10/share
        Corporate Property Associates: 15 (purchased 7/15/04)- $10/share

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