wrong. In fact, they did just what every other party (except Doc) did; they looked out for their best interest. My beef with the situation is that our CEO cannot fairly negotiate a package for himself while concurrently negotiating for the shareholders.
In fairness, I've seen nothing in writing concerning Doc's $28mm payment, other than Reitmaster's post so I'm assuming his information is good.
You can bet that if all that Doc got out of this thing was his 1.6mm shares a better deal would have been struck.
In reading over the posts on this board, and at Reitmaster's Club site, it seems obvious that the deal PZN has entered into is abhorent to almost all shareholders. It is so blatently dishonest that even the least sophisticated or casual observer immediately is able to see many of the negatives involved.
I cannot see how the lawyers can fail to tear PZN a new one with this deal! I've seen so many lawyers filing on companies, it is easy to become blase about their prospects, but few of those suits have the foundation of this case.
So... I'm going to go out on a limb here and make a prediction. THIS DEAL WILL NOT BE CONSUMATED! As a matter of fact, I don't think this deal will ever be voted on. PZN will de-reit, being unable to pay dividends, but it will be forced into the slower-growth scenario that it would have been using with more prudent management anyway.
I can't touch your finesse with figures! But I take the 9 month revenues of both companies as of 9/99 and prorate a 4th quarter, then subtract 82% operating costs (roughly that of 96 and 97), 42 million investor cost and 38% taxes. Then I calculate an EPS on a 24% dilution and a 20 PE and get around $5.6 per share. If revenues increase due to either increased occupancy or growth then things may look better. Very basic, I know. My point is that there are still unknowns and still possibilities. I am watching closely because no matter what ethics may be behind the deal, I don't think the group is stupid and IMO they know they need to show a reason why the plan should be accepted. I don't have my head in the sand--I'm watching closely and am well aware this could play out in a bad way. My question remains: why are there so many buyers?
We do not know what was in those other SI proposals. They haven't seen fit to tell us. May have been better for the shareholders, but not so good for Doc. If Doc has a conflict of interest in these negotiations, that could be a real problem. If Blackstone offered Doc a fat package of perks and money to sign a deal that was not the best for shareholders, that might be called a bribe. I find it curious that IR was reassuring us that the company "would not screw over the shareholders" (verbatim quote from my conversation with a woman whose name I know but will not post), while the i's were dotted and the t's crossed on this deal we are told was not "chosen" until the last minute. I suppose we were being treated to some "Bill Clinton logic" in the CC. I would love to see a discovery process to uncover the chronology of this "deal." Every time PZN/CCA makes a move to fix a problem, big money goes out the door for fees to "consultants," bankers, and wall street "houses" (and you know the kinds of houses I mean). This stinks.
This stock is overvalued at $5. Otherwise, why would mgmt sell it to the SI group for $2.21. In effect, that is what they are doing. The SI group gets a 12% cash dividend for a minimum of 5.5 yrs. That is $4.29 (5.5 * $0.78.) $6.50 - $4.29 equals $2.21. The only condition is that they hold the stock for 5.5 yrs. (Of course, it's even less than $2.21 with all the other perks that the SI group gets.)
This makes me feel ripped off, and I bought the stock for $4 9/16 per share. I say, forget the S.I. group. Keep the REIT, sell more common stock for $2.21 (actually maybe someone else would even give us more), and skip the after tax preferred dividend. (That might leave something for us common shareholders.)