Lapides Comments On Post Properties Buy Out Options
28 Mar 2008
Market dries up bidders for Post Analysis firm says founder out of picture, interest in company down considerably.By Julie B. HairstonThe Atlanta Journal-ConstitutionPublished on: 03/28/08 A real estate market analysis firm says that Post Properties founder John Williams has abandoned his effort to buy back the company. Green Street Advisors said in a report this week that Williams' investment partner, Cadim Realty Advisors, has backed away from the deal. The company now must consider one other bid at a lower price, the report stated. Williams declined to comment on the status of his bid. "The company has designed a fair process, and I hope they get a great result," he said. Company officials have repeatedly refused to make any statements about the possible sale of the company until the process is concluded. Green Street analyst Haendel St. Juste said market interest in Post has waned significantly since last year, when the company spurned offers as high as $54 per share. Increased financing costs, a large pipeline of planned development at Post and widespread investor distrust of any real estate investment in the wake of the mortgage market shakeout has kept suitors on the sidelines, the report said. Since Post announced in February that it would entertain bids other than the $44 to $47 per share Williams was offering, speculation swirled about the possibility of additional bidders and the ultimate sale price. Post shareholders' concern about the company's fiscal position was underscored by the efforts of Pentwater Capital Management to replace five Post board members with an alternative slate at the upcoming annual meeting. "Clearly, there's been a missed opportunity for the company to sell," St. Juste said. "The shareholders would have been better off if the company had sold last year." No date for Post's meeting has yet been announced. Last year's meeting was May 24. As it is, St. Juste said, shareholder disappointment in missed profits and looming challenges could prompt adoption of the Pentwater slate, which would replace a majority of the nine-member board. "It's been the talk for quite a bit of time that there are a large number of shareholders that are unhappy," St. Juste said. And a new board majority may be inclined to bring in its own set of executives to retool Post's strategy and improve shareholder value. "It's pretty uncertain at this point how this is going to play out," St. Juste said. "The board and management appear to be in a pretty precarious situation." But Paul Lapides, director of the corporate governance center at Kennesaw State University's Coles College of Business, said hindsight over missed opportunities probably won't be enough to convince shareholders that a wholesale shake-up of the company is necessary. "In these sorts of battles, it's rare that the dissident board gets elected," he said. Lapides said too little is known about the members of the Pentwater slate to provide a compelling alternative to the current board. He noted that Post has been consistently profitable and produced dividends throughout 2007. "I would be happy to be a shareholder at Post under this board," Lapides said. But the current volatility of the real estate market could generate atypical shareholder sentiments, according to Green Street. "Some interesting potential scenarios are emerging," St. Juste said. "Who knows how they will play out?"
Market dries up bidders for Post
Analysis firm says founder out of picture, interest in company down considerably.By Julie B. HairstonThe Atlanta Journal-ConstitutionPublished on: 03/28/08
A real estate market analysis firm says that Post Properties founder John Williams has abandoned his effort to buy back the company.
Green Street Advisors said in a report this week that Williams' investment partner, Cadim Realty Advisors, has backed away from the deal. The company now must consider one other bid at a lower price, the report stated.
Williams declined to comment on the status of his bid. "The company has designed a fair process, and I hope they get a great result," he said.
Company officials have repeatedly refused to make any statements about the possible sale of the company until the process is concluded.
Green Street analyst Haendel St. Juste said market interest in Post has waned significantly since last year, when the company spurned offers as high as $54 per share.
Increased financing costs, a large pipeline of planned development at Post and widespread investor distrust of any real estate investment in the wake of the mortgage market shakeout has kept suitors on the sidelines, the report said.
Since Post announced in February that it would entertain bids other than the $44 to $47 per share Williams was offering, speculation swirled about the possibility of additional bidders and the ultimate sale price.
Post shareholders' concern about the company's fiscal position was underscored by the efforts of Pentwater Capital Management to replace five Post board members with an alternative slate at the upcoming annual meeting.
"Clearly, there's been a missed opportunity for the company to sell," St. Juste said. "The shareholders would have been better off if the company had sold last year."
No date for Post's meeting has yet been announced. Last year's meeting was May 24.
As it is, St. Juste said, shareholder disappointment in missed profits and looming challenges could prompt adoption of the Pentwater slate, which would replace a majority of the nine-member board. "It's been the talk for quite a bit of time that there are a large number of shareholders that are unhappy," St. Juste said.
And a new board majority may be inclined to bring in its own set of executives to retool Post's strategy and improve shareholder value.
"It's pretty uncertain at this point how this is going to play out," St. Juste said. "The board and management appear to be in a pretty precarious situation."
But Paul Lapides, director of the corporate governance center at Kennesaw State University's Coles College of Business, said hindsight over missed opportunities probably won't be enough to convince shareholders that a wholesale shake-up of the company is necessary.
"In these sorts of battles, it's rare that the dissident board gets elected," he said.
Lapides said too little is known about the members of the Pentwater slate to provide a compelling alternative to the current board. He noted that Post has been consistently profitable and produced dividends throughout 2007.
"I would be happy to be a shareholder at Post under this board," Lapides said.
But the current volatility of the real estate market could generate atypical shareholder sentiments, according to Green Street.
"Some interesting potential scenarios are emerging," St. Juste said. "Who knows how they will play out?"