Jones Lang LaSalle
AFR Signals Potential Shift in Strategy
Marita Thomas
JENKINTOWN, PA-Following chairman Lewis Ranieri’s promise to "not sit by idly as shares trade at current levels," American Financial Realty Trust canceled its planned REIT Week meetings. "We are greatly disappointed at the current stock price," Ranieri said at the opening of the company’s June 1 shareholders’ meeting. In the past 52 weeks, AFR stock ranged between a high of $16 a share and a low of $9.52 share.
"The status quo should not be tolerated by shareholders and will not be tolerated by [the board]," Ranieri said during the meeting and announced that a review was under way. He said there would be "more details in the weeks ahead," and repeated, "weeks." Among the factors being evaluated, he cited acquisitions, dispositions, capital structure and "other possible strategies," without commenting on a published report that AFR had engaged a financial advisor to consider a potential sale.
The following day, the locally based financial-specialty REIT emailed the National Association of Real Estate Investment Trusts, canceling its previously planned participation at NAREIT meetings in New York June 6-8. The email, as reported by BofA analysts, read in part: "As previously outlined to investors, the company is engaged in a continuing review of a variety of measures to enhance our financial performance, cash flow and shareholder returns.
Unfortunately, it is premature for us to discuss these matters in greater detail as this time, so we believe that our attendance at next week’s NAREIT meeting would not be productive."
In his report, BofA analyst Ross Nussbaum said, "we believe this is a sign AFR may be pursuing a significant strategic event." Among the potential outcomes Nussbaum listed, "a major asset sale, joint venture formation and/or dividend cut." Nussbaum also said, "a company’s cancellation of NAREIT meetings does not necessarily mean a major strategic event is imminent."
An AFR spokesman tells GlobeSt.com he cannot comment, "beyond the statement we made about the cancellation." Shares of AFR closed at $10.48 on June 2, up 5.3% from the day before. The 52-week high of $16 a share was reached nearly a year ago on June 17, 2005. The 52-week low of $9.52 a share occurred on May 3, the day after an AFR first-quarter conference call in which Nicholas S. Schorsch, president and CEO, reported a net loss of $23.4 million for the quarter and lowered its 2006 FFO guidance by between $12.2 million and $15.2 million.
Copyright © 2006 ALM Properties, Inc. All rights reserved. Reproduction in whole or in part without permission is prohibite
AFR Signals Potential Shift in Strategy
Marita Thomas
JENKINTOWN, PA-Following chairman Lewis Ranieri’s promise to "not sit by idly as shares trade at current levels," American Financial Realty Trust canceled its planned REIT Week meetings. "We are greatly disappointed at the current stock price," Ranieri said at the opening of the company’s June 1 shareholders’ meeting. In the past 52 weeks, AFR stock ranged between a high of $16 a share and a low of $9.52 share.
"The status quo should not be tolerated by shareholders and will not be tolerated by [the board]," Ranieri said during the meeting and announced that a review was under way. He said there would be "more details in the weeks ahead," and repeated, "weeks." Among the factors being evaluated, he cited acquisitions, dispositions, capital structure and "other possible strategies," without commenting on a published report that AFR had engaged a financial advisor to consider a potential sale.
The following day, the locally based financial-specialty REIT emailed the National Association of Real Estate Investment Trusts, canceling its previously planned participation at NAREIT meetings in New York June 6-8. The email, as reported by BofA analysts, read in part: "As previously outlined to investors, the company is engaged in a continuing review of a variety of measures to enhance our financial performance, cash flow and shareholder returns.
Unfortunately, it is premature for us to discuss these matters in greater detail as this time, so we believe that our attendance at next week’s NAREIT meeting would not be productive."
In his report, BofA analyst Ross Nussbaum said, "we believe this is a sign AFR may be pursuing a significant strategic event." Among the potential outcomes Nussbaum listed, "a major asset sale, joint venture formation and/or dividend cut." Nussbaum also said, "a company’s cancellation of NAREIT meetings does not necessarily mean a major strategic event is imminent."
An AFR spokesman tells GlobeSt.com he cannot comment, "beyond the statement we made about the cancellation." Shares of AFR closed at $10.48 on June 2, up 5.3% from the day before. The 52-week high of $16 a share was reached nearly a year ago on June 17, 2005. The 52-week low of $9.52 a share occurred on May 3, the day after an AFR first-quarter conference call in which Nicholas S. Schorsch, president and CEO, reported a net loss of $23.4 million for the quarter and lowered its 2006 FFO guidance by between $12.2 million and $15.2 million.
Copyright © 2006 ALM Properties, Inc. All rights reserved. Reproduction in whole or in part without permission is prohibite
posted by Jones Lang LaSalle NJ News Blog at 4:35 PM
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