I feel badly for all the investors that have been
taken to the cleaners by Crants & Co., including
myself. These guys should be sent to jail. I also don't
blame anybody for voting no, for no other reason than
to make sure that these thieves don't walk away with
any money and that the other OpCo investors aren't
made whole. But for all those who think Blackstone is
stealing PZN I would ask one question. Why hasn't anyone
else come along to offer a better deal? There are
enough savvy players out there that would surely step in
to fill the void if they saw the value in PZN. Who
knows, that may yet still happen but if it doesn't it
speaks volumes about PZN's current plight and may
indicate that Blackstone & Co. are not getting the deal of
the century after all.
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.
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
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
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.)
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.)
I just wonder
what Dreman plans to do.
The stock could have easily earned $1.50 a share
this year without changing anything. It does not even
have a lot of debt or anything really bad. The stock
loss selling, insider trading on this deal, and the
delay a dividend payment announcement lowered the stock
price to 5 at Christmas. Look at Vectorvest (for
laughs) it still values PZN at $39. Once, the Christmas
present was delivered this stock is limited to a $5 stock
until the vote. If a "no" vote is delivered and the
management trys to maximize earnings the stock will
Without the deal to $20 in 2 years.
The "yes" vote
will give the $20 value to the investment group and
OPCO risk free. There still may be a little left for
some appreciation. With a yes vote $10 in 2 years.
Unless this non-profit organization trys to tap a little
straighten me out. Yes I forgot a few key items,
the earnings from the subs and the tax benefit from
Opco. I was assuming the tax benefit would be a "next
The thing about taking the tax
benefit in our assumotion now, means it won't be there in
the 1st quarter. Things really start to look sloppy.
How the hell they are going to stuff a $60mm
preferred div. payment and $92mm in "fees" in this equation
goes beyond my math skills. 2000 would be a total wipe
out and part of 2001 too it seems to me, if the
company makes it, you agree socksey?
part is gross revenues are DOWN quite a bit from 1998.
I've heard no one explain why, amazing as that is.
Not positive but the revenue explanation could be
that in 99 the services companies gross revenue is not
reflected but was included in 98 as combined entity. In 99
the income statement reflects the service companies
earnings only. Need to do more work to understand the 90
million in fees. That number is obscene.
Re: Gross revenues '98 v '99
AOL Investment Research, revenues for the first nine
months of '98 were 484,505k. If I look at the 9/99 10Q,
revenues for the first nine months of '99 were 220,802 for
PZN and 365,222 for CCA for a combined total of
586,024. That's an increase of 21%. What am I missing
You can't combine PZN and CCA to make that
comparison. There are too many payments back and forth which
cause double counting. Instead you would have to rely
on their proforma numbers as provided in the 10Q.All
numbers are for 9 mos.YTD:
1998 PZN proforma rev =
1999 PZN rev = $220.8M(up 40%)
1998 PZN proforma NI
1999 PZN NI(excluding tax cost for
REIT conversion) = $169M(up 39%)
comes when you add in CCA. My derived numbers from old
1998 CCA NI = -37.7M
1999 CCA NI =
This gives a proforma for the new combo as:
1999 NI = $84.5M(excluding tax on
The drop off in CCA NI does not mean that the problem
is with CCA operations as their NI is controlled
largly by the cross payments with PZN. But I think the
overall proforma results do say that the problem is with
expense(both PZN and CCA) and not so much with revenue growth.