CTO - Consolidated Tomoka Land Company

[Travis Wiedower]

$90 NAV is pretty ambitious. I would say its between $75-80. From what I've heard the highest offer they got was $65 a few months ago.

 

Curious if you've gone through and valued everything they own to come up with that $75-80 NAV figure? Everyone I know who's done the work (including myself) seems to agree on a range closer to $90-110. What that NAV is worth in a sale I'm not quite sure but it's more than $50.

[gg]

In my opinion, trying to peg this thing to an exact 5-10 (or even 20) dollar per share price is a fools game, as the valuations are so dependent on the current land sales closing, And future land sales, their pricing and their timing.

 

Ultimately, the company's presentation takes a good approach, in which it calculates the implied market valuation on the raw acreage, based on a couple easy to justify assumptions (namely that the cash flowing real estate is worth about what they paid for it and the notes are worth their face value). They end up with an implied average of under 10,000 per acre left, and then you can compare that to past sales and see if you think that's conservative or aggressive.

[valcont]

Curious if you've gone through and valued everything they own to come up with that $75-80 NAV figure? Everyone I know who's done the work (including myself) seems to agree on a range closer to $90-110. What that NAV is worth in a sale I'm not quite sure but it's more than $50.

 

Here are my numbers

    Income  :16m  @7% cap  -            $230M

    Land : Under contract –                  $103M

    East Of 95 - 1000 acre @ 250k      $250M

    West  -    4400 @ 16  -                  $70M

    Industrial – 1,000 @ 20  -              $20M

                                                      + 24M(Subsurface) + 34(cash) + 15M(Golf etc)

                      Assets                        = 746 M 

                    -  Liabilities                    = 244M (includes 42M Deferred tax)

                                                        = 502M/5.8 shares

                                          NAV        =  $86.55

 

  Now what kind of buyer would be interested in such a deal. REIT wouldn't be too interested since most of value is locked in non income assets. A builder

or a PE would require a discount since they either have to develop this(capital injection) or sell piece by piece( time value). That discount is worth $5-10.

This is not a Macy's or SRG kind of properties.

 

 

[Gregmal]

Curious if you've gone through and valued everything they own to come up with that $75-80 NAV figure? Everyone I know who's done the work (including myself) seems to agree on a range closer to $90-110. What that NAV is worth in a sale I'm not quite sure but it's more than $50.

 

Here are my numbers

    Income  :16m  @7% cap  -            $230M

    Land : Under contract –                  $103M

    East Of 95 - 1000 acre @ 250k      $250M

    West  -    4400 @ 16  -                  $70M

    Industrial – 1,000 @ 20  -              $20M

                                                      + 24M(Subsurface) + 34(cash) + 15M(Golf etc)

                      Assets                        = 746 M 

                    -  Liabilities                    = 244M (includes 42M Deferred tax)

                                                        = 502M/5.8 shares

                                          NAV        =  $86.55

 

  Now what kind of buyer would be interested in such a deal. REIT wouldn't be too interested since most of value is locked in non income assets. A builder

or a PE would require a discount since they either have to develop this(capital injection) or sell piece by piece( time value). That discount is worth $5-10.

This is not a Macy's or SRG kind of properties.

 

This leaves out the 24,000,000 loan portfolio. The income properties are actually easy, although time consuming, to get a rather exact valuation for. I'll share my breakdown which is kind of a blend of how the company does it in their presentations, and how others seems to do it.

 

Land Under Contract 100,000,000

 

Other assets: 110,550,000

Loans 24,000,000

Subsurface Interest 24,000,000

Beach Front JV 5,700,000 (cost)/ 7,500,000 (conservative FMV of recently approved rezoned parcels with development ability)

Impact Fees, Mitigation Credit, Infrastructure Reimbursement: 10,800,000

Golf Operations @ 1.5x sales 8,250,000

Cash+1031 Restricted Cash 36,000,000

 

Income Properties: 260,828,645

245 Riverside 25,100,000 6.84% 1,717,811

WFC NC 42,300,000 6.52% 2,760,909

TCS Arizona 8,133,096 7.75% 630,315

Bloomin Brands 14,900,000    est 5.00% 745,000

WFM 2014         22,914,730 5.10% 1,168,651

Lowes TX 2014   15,283,333 6% 917,000

At Home NC   9,190,000 est 7.00% 644,000

The Grove             11,400,000    ***   est 475,000 (24 hour tenant avg 375,000 NOI, Wawa 100,000, plus remaining subspace)

Hilton Resorts 2013  19,493,075  8% 1,559,446

DKS     6,890,625   8% 551,250

BBY                     5,343,750  8% 427,500

Harris Teeter 2008 10,836,000  6.25% 677,250

Big Lots AZ 2013  5,621,538 6.50% 365,400

BofA Monterey 8,400,000   est 5.50% 462,000

Mason Commerce  4,270,477 9.00%      384,343

BKS FL         3,644,670          10% 364,467

Big Lots MD 2013 5,511,476 6.50% 358,246

Concierge FL 4,396,022 9.00% 395,642

RAD WA 2013 7,441,853  7.50% 558,139

Lamar (WBP) 850,000 10.00% 80,000

Walgreens GA 6,048,000 6%       362,880

Walgreens FL 5,460,000 6% 327,600

CVS TX 14,900,000 est 4.40% 650,000

7-11 TX 2,500,000 5.44% 136,000

 

These reflect updated FMV using comps. However if you simply want to use purchase price, you get numbers higher than what you get using a straight 7% cap.

 

Total 471,378,645 + 6,400 acres of land

 

Less Liabilities 151,400,000

Debt 137,400,000

Payables+Infrastructure 14,000,000

DTL is wiped out now that REIT conversion is back on

 

Confirmed Assets 471,378,645 + 6,400 acres minus liabilities 151,400,000 gets us to +319,978,645 + 6,400 acres

 

Current Shares Outstanding est. 5,720,000

 

FV $55.94 + 6,400 acres land

 

From the 6,400 there is

the mitigation bank which is 2,366 acres the company has guided as yielding between 5,000-12,000= 11,830,000-28,392,000

Residential deal in final phases of negotiations, 1053 acres at 15,000-20,000 per acre= 15,795,000-21,060,000

 

2,981 Acres left, add another 27,625,000-49,452,000

 

Now we're at 60.77-64.56 + 2,981 acres (of which >1,000 are prime I95 land that on the low end run 150k/acre)

 

Even here if you run 150k/acre for the 1,000 East I95 and 15k/acre for the Industrial+West this gets you another $31.42 bringing your still very reasonable NAV to a range of 92.19-95.98. Of course one can make the case the industrial acreage is worth more than 15k and the I95 land more than 150k but I'm fine going by this.

 

How do you unlock this? You take out mortgages at a conservative 60% LTV on the income properties so you still capture a positive spread yet now have roughly 150,000,000 new cash on top of the 84,000,000 from cash+loans+subsurface. 234,000,000 is a lot of money to return to shareholders. Especially against the current 290,000,000 market cap. And the best part is you can do it without really touching anything core

[valcont]

 

This leaves out the 24,000,000 loan portfolio. The income properties are actually easy, although time consuming, to get a rather exact valuation for. I'll share my breakdown which is kind of a blend of how the company does it in their presentations, and how others seems to do it.

 

Land Under Contract 100,000,000

 

Other assets: 110,550,000

Loans 24,000,000

Subsurface Interest 24,000,000

Beach Front JV 5,700,000 (cost)/ 7,500,000 (conservative FMV of recently approved rezoned parcels with development ability)

Impact Fees, Mitigation Credit, Infrastructure Reimbursement: 10,800,000

Golf Operations @ 1.5x sales 8,250,000

Cash+1031 Restricted Cash 36,000,000

 

Income Properties: 260,828,645

245 Riverside 25,100,000 6.84% 1,717,811

WFC NC 42,300,000 6.52% 2,760,909

TCS Arizona 8,133,096 7.75% 630,315

Bloomin Brands 14,900,000    est 5.00% 745,000

WFM 2014         22,914,730 5.10% 1,168,651

Lowes TX 2014   15,283,333 6% 917,000

At Home NC   9,190,000 est 7.00% 644,000

The Grove             11,400,000    ***   est 475,000 (24 hour tenant avg 375,000 NOI, Wawa 100,000, plus remaining subspace)

Hilton Resorts 2013  19,493,075  8% 1,559,446

DKS     6,890,625   8% 551,250

BBY                     5,343,750  8% 427,500

Harris Teeter 2008 10,836,000  6.25% 677,250

Big Lots AZ 2013  5,621,538 6.50% 365,400

BofA Monterey 8,400,000   est 5.50% 462,000

Mason Commerce  4,270,477 9.00%      384,343

BKS FL         3,644,670          10% 364,467

Big Lots MD 2013 5,511,476 6.50% 358,246

Concierge FL 4,396,022 9.00% 395,642

RAD WA 2013 7,441,853  7.50% 558,139

Lamar (WBP) 850,000 10.00% 80,000

Walgreens GA 6,048,000 6%       362,880

Walgreens FL 5,460,000 6% 327,600

CVS TX 14,900,000 est 4.40% 650,000

7-11 TX 2,500,000 5.44% 136,000

 

These reflect updated FMV using comps. However if you simply want to use purchase price, you get numbers higher than what you get using a straight 7% cap.

 

Total 471,378,645 + 6,400 acres of land

 

Less Liabilities 151,400,000

Debt 137,400,000

Payables+Infrastructure 14,000,000

DTL is wiped out now that REIT conversion is back on

 

Confirmed Assets 471,378,645 + 6,400 acres minus liabilities 151,400,000 gets us to +319,978,645 + 6,400 acres

 

Current Shares Outstanding est. 5,720,000

 

FV $55.94 + 6,400 acres land

 

From the 6,400 there is

the mitigation bank which is 2,366 acres the company has guided as yielding between 5,000-12,000= 11,830,000-28,392,000

Residential deal in final phases of negotiations, 1053 acres at 15,000-20,000 per acre= 15,795,000-21,060,000

 

2,981 Acres left, add another 27,625,000-49,452,000

 

Now we're at 60.77-64.56 + 2,981 acres (of which >1,000 are prime I95 land that on the low end run 150k/acre)

 

Even here if you run 150k/acre for the 1,000 East I95 and 15k/acre for the Industrial+West this gets you another $31.42 bringing your still very reasonable NAV to a range of 92.19-95.98. Of course one can make the case the industrial acreage is worth more than 15k and the I95 land more than 150k but I'm fine going by this.

 

How do you unlock this? You take out mortgages at a conservative 60% LTV on the income properties so you still capture a positive spread yet now have roughly 150,000,000 new cash on top of the 84,000,000 from cash+loans+subsurface. 234,000,000 is a lot of money to return to shareholders. Especially against the current 290,000,000 market cap. And the best part is you can do it without really touching anything core

 

Yes I forgot to add the 24m or about $4/share. You still have to include the deferred tax liability of 42m or $7.2/share. This is not a REIT yet and will not be at least until 2018 so lets see what a buyer would pay for it today.

 

So I was pretty liberal with the valuation of the 6400 acre. I had 1000 acre East of 95 at 250K based on the recent sales. But in the asset sales , the best lots goes first. So I think 150K/acre is a reasonable guess. Same for the land west at 16k/acre. So If I take your valuation of $92-$96/share

and subtract $7 for DTL. I get $85-89/share. Which begs the same question, how do you monetize that? Sell at a discount or some other way.

 

Taking mortgage on income properties is a bad idea. The commercial mortgage interest rates are between 4.5-6%. At 5% they will pay $7.5m in interest expense on about 20m FCF (assuming they convert $100m cash into about $15m income properties). This will be terrible for their REIT conversion. REITs are valued based on FFO multiples. Why reduce your FFO when you can get the valuation in multiples of it?

 

Lets also do a quick back of the envelop calculation of CTO REIT. The management has indicated about $3/share of income including the income from the $100m they just received. At today $50 price, they are yielding at 6%. The diversified REITs like these yield about 4.25% (I have included the spreadsheet as attachment) so this should trade at $70 plus some cash and land assets.

 

Every bull thesis mixes the asset play and the REIT conversion. If you are in an asset play , you have to discount the value for the time it will take to dispose these assets since they are not producing any income. REIT appeals to income investors . Why would they pay up for the assets?

 

Reits-valuation.xls

[Gregmal]

Those are solid points and as of right now I think investors have a bit stickier of a road ahead than many assume. If you look at investor sentiment, the preference is for monetization, however management is very much in favor of the REIT. Do we all make money in both situations, sure. Both with REIT conversion also comes a big tax bill and a new valuation metric (FFO as you mentioned) vs the current situation in which this is really only a SOTP play.

 

People like to discount time value of land monetization factor but the truth is that in the current ZIRP environment, $1 today is worth about the same as $1 5-10 years from now. The cost of carry on the land is a little over 1,000,000 per year so a potential buyer isn't overly burdened nor forced to create some crazy 15-20% IRR to break even. The lack of sale came from the process not being run with the intent or desire to sell; management had nothing to lose fighting this, which is exactly what happened.

 

In the first post here the guy talks about this possibly being a 5-10 year process. That seems spot on. 2-3 years form now, this is higher regardless of REIT or no REIT. As the income portfolio has grown, I've begun to question whether it wouldn't make sense to go REIT and then spin out the land as a separate company. I have no clue what the tax implication is there, but people banking on a re-rating from REIT may be in for a rude awakening. The current executive team has demonstrated zero ability to realize value for it's shareholders and as I'm sure many are aware, companies can simply remain perpetually undervalued, especially land co's.

[Gregmal]

So I was pretty liberal with the valuation of the 6400 acre. I had 1000 acre East of 95 at 250K based on the recent sales. But in the asset sales , the best lots goes first. So I think 150K/acre is a reasonable guess. Same for the land west at 16k/acre. So If I take your valuation of $92-$96/share

and subtract $7 for DTL. I get $85-89/share. Which begs the same question, how do you monetize that? Sell at a discount or some other way.

 

New here so didn't figure out the quoting thing til now but what I would say here is that those values don't really need discounting, at least not in my opinion. That's your margin of safety. The sale Friday basically encompasses the low end of the I95 land. I'd use 150k if I needed a fire sale liquidation number. Realistically you've got about 350-400 acres that are no question about it 250,000 land and then a congestion of land probably worth between 150,000-250,000, numbers that will only go up as development continues. In fact one of the worries I've had, is much like the Tomoka Town Center plot, management will blow this out in bulk too soon, rather than let it ride out the wave of growth taking place. The Industrial land is realistically probably 25,000-40,000 and acre. The left over ~900 West land probably goes for a small premium to what Minto paid, 20,000-25,000. Plug those figures in and we're already talking $108+. So even with the DTL, $90 is inexpensive. It's just that right now, after the illusion of a sale process just having taken place, people are down beat on the valuations. The truth is two years ago people were calling for $100+ and there is no disputing that this company is in an exponentially stronger position now than it was then.

[valcont]

 

New here so didn't figure out the quoting thing til now but what I would say here is that those values don't really need discounting, at least not in my opinion. That's your margin of safety. The sale Friday basically encompasses the low end of the I95 land. I'd use 150k if I needed a fire sale liquidation number. Realistically you've got about 350-400 acres that are no question about it 250,000 land and then a congestion of land probably worth between 150,000-250,000, numbers that will only go up as development continues. In fact one of the worries I've had, is much like the Tomoka Town Center plot, management will blow this out in bulk too soon, rather than let it ride out the wave of growth taking place. The Industrial land is realistically probably 25,000-40,000 and acre. The left over ~900 West land probably goes for a small premium to what Minto paid, 20,000-25,000. Plug those figures in and we're already talking $108+. So even with the DTL, $90 is inexpensive. It's just that right now, after the illusion of a sale process just having taken place, people are down beat on the valuations. The truth is two years ago people were calling for $100+ and there is no disputing that this company is in an exponentially stronger position now than it was then.

 

I think there is a bit of management discount here. Albright is in no rush to realize the value. They had already delayed the REIT conversion by a year. Firing the management would be a big catalyst.

 

BTW I am not bearish on this. I am just saying the market is correctly discounting the stock. If they can't realize the value in a REIT bull market and an all time high land prices due to low interest rates, you have to discount it over a business cycle.

[Gregmal]

I think there is a bit of management discount here. Albright is in no rush to realize the value. They had already delayed the REIT conversion by a year. Firing the management would be a big catalyst.

 

BTW I am not bearish on this. I am just saying the market is correctly discounting the stock. If they can't realize the value in a REIT bull market and an all time high land prices due to low interest rates, you have to discount it over a business cycle.

 

Completely agree. Management is the problem. Their best case is they continue to get paid quite a bit of money and eventually the stock goes up simply because it is so undervalued and they bank a huge windfall from stock options and run a public REIT from now until they decide to retire. Worst case is they get fired without cause  and 45 days later collect two years salary and keep all their stock options and chances are this is much higher in a short time anyway.

[mateo999]

To the bulls on this thread: in your opinion, why didn't the DB process result in a sale?

[gg]

To the bulls on this thread: in your opinion, why didn't the DB process result in a sale?

 

I would guess it's because there is not a great natural buyer for cash flowing real estate + undeveloped land. REITs would value the cash flowing assets at the highest multiple, but they are unable to do anything with the land. Developers of the land don't have the resources and huge capital market access to buy undeveloped land and  patiently develop ... So, they probably were not able to get an offer that was as high as management values the sum of the parts. And they therefore decided that to maximize value they need to develop the land, and patiently convert the raw land into cash and then into cash flowing real estate. Next, a reit conversion will allow for the highest market multiple on the cash flow, and negate the accrued tax liability.

[mateo999]

Developers of the land don't have the resources and huge capital market access to buy undeveloped land and  patiently develop ...

 

Why do you feel this is a true statement?

[gg]

Developers of the land don't have the resources and huge capital market access to buy undeveloped land and  patiently develop ...

 

Why do you feel this is a true statement?

 

Generally speaking, there is plenty of capital that will back any public REIT (or other reasonably yielding security) of sufficient size (see MLPs, REITs, Highly-rated Bonds, Dividend-oriented ETFs, Dividend-oriented Mutual Funds) and the supply/demand results in a situation where much money chases few opportunities, bidding them up to rich valuations. Of the publicly-traded developers, I am not aware of any that can tap the public markets anywhere close to as easily and regularly as large REITs that wants to buy a new portfolio can, and complete a secondary offering virtually overnight that get over-subscribed. I think development is inherently a riskier proposition, so in addition to the mechanics of the supply/demand imbalance of dividend-yielding-securities, there is a fundamental reason that investors evaluate development projects (and developers) as having greater risk (and therefore, all else equal, lower valuations).

[Gregmal]

Developers of the land don't have the resources and huge capital market access to buy undeveloped land and  patiently develop ...

 

Why do you feel this is a true statement?

 

I don't really buy that. There are plenty of buyers. A PE firm could easily take down the whole entity and then lower their basis over the next couple years by selling off the REIT focused assets and property and collecting the cash from land already under contract. The land costs roughly a million a year to carry. Even if one were to continue to do what is already being done with the land I don't think it would be some crazy long or expensive process. The thing that s being overlooked here is that in order for a sale to have taken place there needed to be a willing seller.

[gg]

Developers of the land don't have the resources and huge capital market access to buy undeveloped land and  patiently develop ...

 

Why do you feel this is a true statement?

 

I don't really buy that. There are plenty of buyers. A PE firm could easily take down the whole entity and then lower their basis over the next couple years by selling off the REIT focused assets and property and collecting the cash from land already under contract. The land costs roughly a million a year to carry. Even if one were to continue to do what is already being done with the land I don't think it would be some crazy long or expensive process. The thing that s being overlooked here is that in order for a sale to have taken place there needed to be a willing seller.

 

Even if you believe that management did not WANT to sell the company, do you think management is eagerly trying to sell the West acreage to Minto? If you do, then you'll understand that even in the best case, with two willing sides to a transaction, selling large plots of this land can take a long time. Local munipalities, federal agencies, preservation groups, etcetera all need to have their say on these things, and that means that converting raw land to more tangible value takes many years, at best. Potential bidders were/are aware of that, and very few public companies or PE groups are willing to undertake the sort of multi-year bet that allows them to maximize the value of all the land.

[Gregmal]

Developers of the land don't have the resources and huge capital market access to buy undeveloped land and  patiently develop ...

 

Why do you feel this is a true statement?

 

I don't really buy that. There are plenty of buyers. A PE firm could easily take down the whole entity and then lower their basis over the next couple years by selling off the REIT focused assets and property and collecting the cash from land already under contract. The land costs roughly a million a year to carry. Even if one were to continue to do what is already being done with the land I don't think it would be some crazy long or expensive process. The thing that s being overlooked here is that in order for a sale to have taken place there needed to be a willing seller.

 

Even if you believe that management did not WANT to sell the company, do you think management is eagerly trying to sell the West acreage to Minto? If you do, then you'll understand that even in the best case, with two willing sides to a transaction, selling large plots of this land can take a long time. Local munipalities, federal agencies, preservation groups, etcetera all need to have their say on these things, and that means that converting raw land to more tangible value takes many years, at best. Potential bidders were/are aware of that, and very few public companies or PE groups are willing to undertake the sort of multi-year bet that allows them to maximize the value of all the land.

 

Fair enough. Who knows what things looked like exactly at the time. I just think now when you look at it, its a much different situation. You're probably right about hesitancy of buyers if they are looking at monetizing 8,000 acres of W-95 residential/farm land. But now we effectively have ~3,000 acres left, with 1/3 being prime acreage worth 150,000-250,000 per. Another 1,000 is industrial land that isn't terrible hard to move either. Per management, they think they'll have the rest of the land sold in 4-5 years. So barring a potential buyer demanding 50% off from FMV, it's still fairly easy to come up with a 15% IRR here, in which case a I have a hard time buying the argument that there were not buyers. Nearly two dozen NDA's were signed. The problem was that you can't ask for NAV with these types of assets.

[BG2008]

I am attending the investor day this Friday.  Please let me know if there are specific questions you would like me to ask given the in person access to management team.  There will also be other investors, so any thoughts on what you would ask other investors would be interesting. 

 

If anyone want to chat over the phone, please PM me. 

 

Thanks. 

[Gregmal]

Anyone attend the Investor Day? Any thoughts or comments?

[valcont]

http://www.businesswire.com/news/home/20161214006257/en/Consolidated-Tomoka-Supplemental-Information-Strategic-Alternatives-Review

 

This should settle the valuation debate for this company. I am surprised they got such a lowball offer but I have always said they will never get $85-90 that some investors are valuing it for.

[BeerBBQ]

http://www.businesswire.com/news/home/20161214006257/en/Consolidated-Tomoka-Supplemental-Information-Strategic-Alternatives-Review

 

This should settle the valuation debate for this company. I am surprised they got such a lowball offer but I have always said they will never get $85-90 that some investors are valuing it for.

 

Valuation debate settled?

 

The 5% premium to the then trading price is based on CTO mangement's estimate of the value of the securities being offered as compensation.

 

 

 

[valcont]

http://www.businesswire.com/news/home/20161214006257/en/Consolidated-Tomoka-Supplemental-Information-Strategic-Alternatives-Review

 

This should settle the valuation debate for this company. I am surprised they got such a lowball offer but I have always said they will never get $85-90 that some investors are valuing it for.

 

Valuation debate settled?

 

The 5% premium to the then trading price is based on CTO mangement's estimate of the value of the securities being offered as compensation.

 

What's wrong with that? Both suitors were publicly traded so it doesn't take a genius to estimate the valuation.

[BeerBBQ]

The press release states "Due to the proposed form of consideration, both offers required the Company to undertake thorough valuations of the bidders’ businesses to understand the value of the securities being offered as consideration." So their determination that the offers were at a slight premium to CTO stock price is based on their estimates of the bidders' businesses.  Those estimates could have been substantially lower than the actual market values of those businesses. They are not providing a clear indication what was actually offered.

[mateo999]

The 5% premium to the then trading price is based on CTO mangement's estimate of the value of the securities being offered as compensation.

 

Where do you see this spelled out explicitly?  In bullet point #6, they spell out that "to understand the value of the securities being offered as consideration" that they'd have to "undertake thorough valuations of the bidders' businesses".  I read that as "we haven't performed thorough valuations".

 

Thus my take is that the 5% premium to the then trading price was calculated using market values of the would-be acquirer shares.

[valcont]

The press release states "Due to the proposed form of consideration, both offers required the Company to undertake thorough valuations of the bidders’ businesses to understand the value of the securities being offered as consideration." So their determination that the offers were at a slight premium to CTO stock price is based on their estimates of the bidders' businesses.  Those estimates could have been substantially lower than the actual market values of those businesses. They are not providing a clear indication what was actually offered.

"Ultimately, the Company received two offers from interested parties, both public real estate companies; one of comparable size to the Company, and the other a smaller company."

"The offers reflected a price-per-share offer for the Company’s common stock of no greater than a 5% premium to the then trading price of the Company’s stock. Both offers represented a discount of nearly 10% to the closing price of the Company’s stock on December 12, 2016."

 

It can not get more clearer than that. If those companies were private, I could have agreed with you. These are publicly traded entities and so I can trust the management not to lowball the estimate by the margins that the bulls are speculating. It may have some contingent payouts based on the sales of parcels over a period of time that may have changed the offer by few percentage points.

[Gregmal]

Don't think too many people close to this situation are surprised by this. After the investor day it was widely speculated they'd pull something like this.

 

Without getting into the merits of the release, and believe me, there is a ton one can pick apart that smells downright rotten, the bigger issue is that when management no longer has any credibility, it's time for a change.

 

Then again, we can take them at their word. Trust them I believe someone mentioned. In which case, during their five year tenure in which they've been paid millions and absorbed generous amounts of granted stock; after an eight month process, in the midst of a blow out real estate market and record low interest rates, in which they supposedly scoured the entire universe of real estate investors for any number of ways to create value, the best they could do was fetch two all stock offers from companies insinuated to be distressed micro-cap lepers. So yeah, on that front they've earned themselves a pink slip as well.