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Corrections Corporation of America Message Board

  • oystergrouch oystergrouch Jan 30, 2000 10:54 PM Flag


    so resistant to converting back to a C company? If PZN remains a REIT, don't the troubles continue?

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    • We are not against the C-Corp we are against they
      way it was handled. We waited all December to hear
      about our dividend. Then we got our Christmas present
      December 26th, the 8-K. Which basically gives away 38
      percent of the company to the investors for nothing then.
      The actual merger of CCA and PZN was not too bad. It
      is the preferred stock and warrants to the investor
      group. IMHO, the cash infusion is not now needed.
      Especially since we pay no dividend. This company has low
      debt compared to equity, is very profitable, P/E ratio
      of 2, and earnings expections are rising. What is
      want is a C-Corp and a 10 percent dividend declaration
      and elimination of all debt (except to build a
      specific prison). This cash infusion is not needed
      according to the balance sheet.

      With the stock so
      low now 4 3/8, the deal would actually not be to bad
      to new investors. The group must pay $6.50 per
      share. But for us old ones, we got our KY.

      • 1 Reply to billberggren
      • Yes, I'm lurking but still here, and still
        holding a position.

        Re: C-corp, well I do know
        that whatever PZN is now, it's not a REIT, because it
        didn't qualify as one in 1999, regardless of
        management's "intention" to be one. What does that make it?
        I'd guess a C-corp. What else could it be at the

        Re: The Blackstone proposal, the whole notion of a
        strategic investor was made necessary by covenents on the
        loans, written by the banks, which insured that more
        funds flowed in before the special dividend was paid.
        Well now the 1999 special hasn't been paid, and can't
        be in the future. So the original purpose of an SI
        has gone out the window with REIT status and the

        Now some have claimed that cash is so short that an
        infusion is absolutely necessary, but I don't see that
        Blackstone is the only group in the world with cash, and the
        options are myriad. Surely one with a fairer outcome for
        current shareholders can be constructed.

        Voting on
        this deal is not about voting for C-corp status (or
        REIT status either, for that matter); it's not about
        voting for a cash infusion (as opposed to going it with
        cash on hand); it's not about saving PZN from

        What this deal is really about is smoothing the exit
        of some incompetent managers by feathering their
        beds and indemnifying them against the repercussions
        of the lousy decisions they've made in the past 24
        months. And in return for doing so, Blackstone carves the
        heart out of PZN's profitability.

        I'm inclined
        to vote no on the Blackstone proposal, and hope that
        some of the larger institutional holders will do the
        same, and moreover, package up some alternative
        financing that will put this moneymaking operation back
        onto the financial base where it can get on with
        making profits. Smaller common holders have to throw in
        with the larger ones and hope they will sponsor a
        proposal with much less larceny than the Blackstone

      resistant to converting back to a C

      I believe for many of us, I won't try to speak for
      all, the question is not whether or not to become a
      "C" corp, but rather whether or not to to agree to
      the lousy deal that management has put at out feet.
      That is the issue that most of us are opposed to this
      deal which gives most of OUR company to BlackStone and
      to management at our expense.

      • 2 Replies to Need_High_Yield
      • Of the few options we have, what's the lesser
        evil? Even if Doc gets away with another gain, wouldn't
        we still be better off with a more reliable company
        managing PZN? JP you are in Florida. Do you read Mel
        Berko's column? He gives great investment advice. I am in
        the upper midwest and he is unavailable to me.
        Sometimes friendly snowbirds mail a copy to me. Point
        is..if you read him, has he spoken about PZN?

      • To add to NHY comments, stockholders are not
        opposed to C-corp conversion, many on this board have
        been calling for it, but they DO want to put a stop to
        management's practice of robbing them again and again. They
        don't trust Doc, blame him and junior for ruining their
        investments through a string of deals and self-serving
        giveaways, not being open with the shareholders on key
        issues, spec prisons being built in the face of declining
        occupancy -- I could go on but why bother. It seems that
        every time an announcement is made, there's a BIG fee
        being paid to somebody -- and that in turn causes big
        blocks to be puked onto the tape. Now we are supposed to
        reward Doc for this by giving him a nice payment not to
        do any more damage? And indeminify him against the
        many lawsuits sure to come? It ain't the conversion,
        it's the very smelly deal.

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