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Corrections Corporation of America Message Board

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  • olddaddygram olddaddygram Jun 6, 1999 8:51 PM Flag

    From the ridiculous to the sublime---

    What is the potential for a corporate raider to
    take over PZN and sell off the OPCO leases ? It seems
    to me that every prison PZN is involved with is
    undervalued,based on the current stock price. I believe convincing
    arguments could be made to state governments to buy back
    their leases and issue bonds at a rate that would give
    them a much lower capital expenditure rate than they
    have now. I realize the bonds would adversely effect
    the states' bond ratings and the public would
    complain about it, but their is no question in my mind
    that the prisons owned by PZN have a greater value
    than the stock. Do the leases with the states, the
    loan agreement covenents with the lenders and bond
    instruments address this question?

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    • I seem to recall something about the REIT bylaws
      that make hostile takeovers difficult. I'd have to do
      some research to figure it out, but maybe someone else
      could help.

      I posted last week that if I could
      raise the money, I would buy every share of PZN,
      leverage it up, pay myself a huge dividend, sit back for a
      few years while it cash flowed away the debt, then
      sell it for for a few billion dollars profit.

      Well, I can't raise the money, but Doc is surrounded by
      plenty of folks who can. Sodexho, Massey-Burch, Baron
      Capital, HSBC and so forth. Those of you calling for Doc's
      resignation will see this company go private first. And
      before that happens, Doc will no doubt do everything he
      can to vindicate his strategy. Might be able to,
      might not. At some point though, in Doc's words, it
      falls in the category of "life's too short".

    • Do a little home work and you will find out almost ever state pzn deals with wants them out or are having problems with there operated facilities at this time.

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