American Land Lease 7.75% Series A Pdf

[ericd1]

I would appreciate thoughts and comments on this PFD.

 

American Land Lease (ANL) is being purchased by Green Courte Partners, LLC.

 

ANL is trading at $13.26 and GCP all cash offer is for $14.20, expiring on Feb 17th. (200%+ the December price when the offer was made)

 

That's 7% for holding the stock a week, but the PFD's appear very under-valued.

 

American Land Lease, 7.75% Series A Cumulative Redeemable Preferred Stock, liquidation preference $25 per share, redeemable at the issuer's option on or after 2/23/2010 at $25 per share plus accrued and unpaid dividends, with no stated maturity, and with distributions of 7.75% ($1.9375) per annum paid quarterly on 2/28, 5/31, 8/31 & 11/30 to holders of record on the date fixed by the board, not more than 30 days or less than 10 days prior to the payment date. (REIT not eligible for the 15% US dividend tax)

 

$25.00 PFD's are trading at $9.50, yielding ~20.0%

 

GCP is a private investment company, but (making a huge leap of faith) presume they will be able to continue paying the dividend.

 

Questions --

 

What happens to the taxation of the PFD?  Does it become eligible for the 15% tax rate?

 

Presuming GCP is ok, shouldn't the value of the PFD increase (yield decrease) --

 

The market suggests otherwise as the price of the PFD has declined 20.7% YTD. 

 

Appreciate your thoughts...Eric

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[JAllen]

I bought the common for the tender offer but,  it won't be just a week.  It will take until all shares tender which, really is an unknown.  I believe that 93% have been tendered already.

 

Re: PFD

 

It is hard to tell the financial strength of Greene Court but, evidently they have enough to buy all of the common.  Probably the PFD prospectus should have more information about a change of control

 

[Guest misterstockwell]

Series A Preferred Stock

 

Each share of 7.75% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”), issued and outstanding immediately prior to the Effective Time will remain outstanding as a share of 7.75% Series A Cumulative Redeemable Preferred Stock of the surviving entity following the consummation of the Merger having the same powers, rights and preferences and will otherwise be unaffected by the Merger. Parent and Purchaser have indicated that following the completion of the Merger, shares of the Company’s Series A Preferred Stock are expected to be delisted from the New York Stock Exchange (“NYSE”) and are not expected to continue to trade publicly. Parent and Purchaser have also indicated that they intend to cause the Company to terminate its registration under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which will terminate its reporting obligations and reduce the amount of information about the Company that will be publicly available to holders of the Company’s Series A Preferred Stock.

 

So, you will become a private real estate investor.

[Guest misterstockwell]

The more I read, the more suspicious of this I get. These preferreds are cumulative, and if they got 6 quarters behind in payment, preferred holders were protected by their ability to then elect 2 members to the board. That protection obviously goes right out the window with the new owners. They could conceivably just stop payment of preferred dividends and let them add up over time. Holders would have no recourse. If I was a holder of these securities, I would be working to block the deal unless I was made whole.

[Guest misterstockwell]

This makes no sense at all really. They state that the preferred will be delisted and deregistered, yet "Each share of Series A Preferred Stock issued and outstanding immediately prior to the Effective Time will remain outstanding as a share of 7.75% Series A Cumulative Redeemable Preferred Stock of the Surviving Entity having the same powers, rights and preferences and will otherwise be unaffected by the Merger."  How can that be? Will the assets acquired be segregated and Green Courte Partners financials will have no bearing on these assets? Do preferred holders get board representation at Green Courte? The preferreds are superior to what asset class then?

 

If I was a preferred holder, I would be pissed!

[ericd1]

I called GCP about the PFDs and was referred to their IR group. (888-750-5834)  All they could tell me about the PFD was to read the statement in the tender offer (same as previously posted by misterstockwell). I suggested to the IR contact that more information regarding the PFDs would be appreciated.

 

I presume that legally GCP is obligated to pay the dividend and redeem at $25.00 a share, but as indicated the dividend could be suspended and the PFDs do not have a maturity date.

 

 

 

 

[bablu]

question for pof4520 and others :

 

Just wondering if you can share , how you can keep on top of these M&A deals such as any free news resources , magazines etc ? ..

 

most of the deals I know are from the www.mergerjournal.com website..

 

I bought ANL as an arbitrage play around 13.45.

 

I also bought fsy.to around 6.30 or so to be takenover end of next month for 7.00 CAD..

 

Thanks in advance