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?
I think you need to go way back to get a good perspective of whats happening today. CCA merged into PZN so the 4th quarter of 1998 was buried, I'm not going to tackle that one, though I know it what should be done, breaking it out of PZN 1999 statements. Check these out. I have combined CCA and PZN in both cases as PZN derives all of it's income from CCA. Bascally I just took out CCA leases and licenses fee payment (and removed it's 1999 interest payment to PZN too.) We really need NewMK to do this but you'll get the idea.
Est.1998 Combined CCA+PZN in millions
..................................% of total Rev Rev..................$663 opert. exps..........$497.....75%
drep(CCA+PZN..........$34 G&A exp...............$22.4 Total Exps...........$553.4....84%
Do you really think investors will give PZN a P/E of 20?? At least not before a couple of full quarters of results. Then we're looking at a $6.00 stock next October if all goes well. Geez... If this is the best plan they could come up with, maybe they ALL are as incompetent as Doc in negotiating with lenders. As I see it, from this conference call, they ARE as incompetent as Doc in dealing with PR, dealing with the analysts and shareholders. Maybe they ALL need to GO!