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Corrections Corporation of America Message Board

  • brendy45 brendy45 Jan 5, 2000 11:19 PM Flag

    Food for thought....

    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.

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    • 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.

      • 3 Replies to RetiredPaperman
      • 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
        management anyway.

      • 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

    • is it possible that blackstone is snapping up all the shares @ $5 hoping to take PZN private?
      Is it possible that they threw out a bogus deal anticipating the selloff?

    • 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
      year" thing.

      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?

      The scary
      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.

    • Your right, is it 4 service companies?

      THis is good news on the CA front in San Diego. Feds are back in business.

    • I am going to sit tight an see what happens with fourth qtr results. The awards are great but there will start up cost in first couple of quarters that will cloud the longer term profitability.

    • Re: Gross revenues '98 v '99

      According to
      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
      = $121.3M
      1999 PZN NI(excluding tax cost for
      REIT conversion) = $169M(up 39%)

      The problem
      comes when you add in CCA. My derived numbers from old
      10Q's are:
      1998 CCA NI = -37.7M
      1999 CCA NI =

      This gives a proforma for the new combo as:
      1998 NI
      = $83.6M
      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.

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28.98-0.28(-0.96%)11:04 AMEDT