There is no dilution. This deal is accretive to CLP. CLP is paying $2.68 divvy per year. The merger is 4 shs TCR for each shr of CLP. TCR is paying .80 per year X 4= $3.20 @ 4 to 1. TCR shareholders will lose .52cts per year and CLP will gain .52cts per year. This is a great deal for CLP and a bad Deal for TCR shareholders of which I am one and I will vote against this merger as will many other TCR shareholders.
My notepad calculation shows the deal takes CLP's FFO from 3.65 down to 3.40 the first year. This does not look accretive for CLP and may explain why CLP share price took a hit. TCR shareholders are getting a good deal considering what they had "not going" for them. The whole premise is based on an assumption that the apartment sector is where the growth will be going forward. Good luck. On the bright side the new 79% payout will look good compared to other "apartment reits".
The flip side is that TCR is contributing mostly old high maintenance properties (except for MRYP properties). CLP is contributing mostly newer more valuable properties. Newer properties yield less but are further away from major expensive renovation. Just because they yield less, does not make them less valuable. TCR's dividend was at a hard to sustain level. CLP's lower dividend has a good cushion of cash flow, the excess of which is being reinvested for growth.
I consider any argument in favor of the merger based on economies of scale as Bull$ht. Even MRYP, far smaller than TCR was large enough. Larger organizations waste more on management salaries and overhead. I also dislike the mixture of property types in CLP. IMHO, a REIT should concentrate on running one property type well. If investors want different property types, they can buy shares of different REITs. Crossing property types is the real estate equivalent of building a conglomerate--it never seems to realize the value of the underlying assets.