CTO - Consolidated Tomoka Land Company

[BG2008]

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.

 

Let me ask a very candid question, if CEO and CFO were to let go, what then?  Do we call up Deutsche Banc and say "let's take these assets out to market again?"  Who's the natural buyer of these assets?  John Albright and Mark Patten were bought in by the BOD put together by Winter.  If Winters messed up once bringing in a management team, can we really trust them to somehow get it right this time around?

 

Why is it that management has no credibility anymore?  If you can list concrete examples of why they lost credibility, I am all ears.  Yes, Albright and Patten did receive a lot of stock.  But isn't Winters largely responsible for that?  Isn't the purpose of tying compensation to stock price part of the reason why they got so much stock to begin with?  Isn't Winters and the board responsible for that to begin with? 

 

My takeaway from attending the investor day is that the assets are "hard to move" and takes time to be absorbed. They literally own 1/4 of the town.  People want to buy either wings or chicken breast, they don't want some weird wings/breast combo that they have to go home and take apart.  CTO is this weird wings/breast combo right now. 

 

From 30,000 ft, I have a small position so I am very open minded to discover the truth.   

[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.

 

Let me ask a very candid question, if CEO and CFO were to let go, what then?  Do we call up Deutsche Banc and say "let's take these assets out to market again?"  Who's the natural buyer of these assets?  John Albright and Mark Patten were bought in by the BOD put together by Winter.  If Winters messed up once bringing in a management team, can we really trust them to somehow get it right this time around?

 

Why is it that management has no credibility anymore?  If you can list concrete examples of why they lost credibility, I am all ears.  Yes, Albright and Patten did receive a lot of stock.  But isn't Winters largely responsible for that?  Isn't the purpose of tying compensation to stock price part of the reason why they got so much stock to begin with?  Isn't Winters and the board responsible for that to begin with? 

 

My takeaway from attending the investor day is that the assets are "hard to move" and takes time to be absorbed. They literally own 1/4 of the town.  People want to buy either wings or chicken breast, they don't want some weird wings/breast combo that they have to go home and take apart.  CTO is this weird wings/breast combo right now. 

 

From 30,000 ft, I have a small position so I am very open minded to discover the truth.   

My 2c.

 

If senior management is let go, I think for the sake of transparency you get to the bottom of the process that occurred with Deutsche and see if there is anything that makes sense. I am not a fan of the sell the company idea. Part of what has turned me off to this group is how quickly they want to fire sale everything in order to do the REIT conversion. They've been telling people 4-5 years they expect to have all the land sold. Why??? Land is a very valuable asset and if it is currently out of favor then hold on it longer. It was a really stupid move to lock in Tanger at a great price per acre and the wholesale the rest of the Town Center to North American at what amount to a lesser price. Otherwise, their lack of credibility is outlined pretty well by a number of people in a number of places, so I'll just leave it at that.

 

Regarding the replacements or Winters elected directors; it is what it is and this is always a risk. Winters could have put his people on the board to begin with but instead he went out and found what seemed to be good, highly qualified, local Florida real estate guys. Over time it seems they grew apart and/or were smitten by Albright. It happens. I didn't marry the first girl I dated and some people even divorce the person they marry. Getting Winters on the board at least would seem to ensure a greater focus on shareholders/value creation. The guys in place right now are too busy with the infighting and too stubborn to take measures necessary to move forward. The current group, at the least, has created a disturbing trend of over promising and under delivering. They've done a lot of underhanded and disingenuous stuff behind the scenes too, which has greatly turned me off to them. An orderly liquidation at this point is where I see the most value being created. Texas Pacific Land Co's been liquidating for 100 years and its been a boon for investors. No reason CTO can't follow in those foot steps.

[mateo999]

I know someone who was a party in the DB process.  Though I know nearly no details, this potential bidder had an NOL vehicle which could have theoretically been used to acquire.  And still, they passed because they couldn't make the economics work.  Asset cost basis / implied tax liability was a big concern.

[Gregmal]

I know someone who was a party in the DB process.  Though I know nearly no details, this potential bidder had an NOL vehicle which could have theoretically been used to acquire.  And still, they passed because they couldn't make the economics work.  Asset cost basis / implied tax liability was a big concern.

 

That is fine and all, but this isn't exactly something new. Without debating the merits of the announced results and/or effort that may or may not have been put into the process, it's hard to imagine that this is really all they were able to accomplish.

 

What you mention regarding taxation and what others have mentioned on the obscurity of certain assets is true. But everyone's already known this for an eternity and if anything, this was likely what a genuine strategic review was supposed to help clarify. Yet after a nine month process, one in which Deutsche Bank didn't even get paid for, they come back to us and pretty much tell us that outside of two undesirable merger parties, there are zero options on the table outside of continuing the current strategy. That is inconceivable

[mateo999]

I know someone who was a party in the DB process.  Though I know nearly no details, this potential bidder had an NOL vehicle which could have theoretically been used to acquire.  And still, they passed because they couldn't make the economics work.  Asset cost basis / implied tax liability was a big concern.

 

That is fine and all, but this isn't exactly something new. Without debating the merits of the announced results and/or effort that may or may not have been put into the process, it's hard to imagine that this is really all they were able to accomplish.

 

What you mention regarding taxation and what others have mentioned on the obscurity of certain assets is true. But everyone's already known this for an eternity and if anything, this was likely what a genuine strategic review was supposed to help clarify. Yet after a nine month process, one in which Deutsche Bank didn't even get paid for, they come back to us and pretty much tell us that outside of two undesirable merger parties, there are zero options on the table outside of continuing the current strategy. That is inconceivable

 

What's inconceivable?  If the stock were at $28 and headed into a process, my guess is there'd be an announced transaction.  But if potential buyers determine the starting price is too high, maybe they don't bid, as they feel it won't be taken seriously.  I find that to be conceivable.  No position.

 

 

 

[Gregmal]

I know someone who was a party in the DB process.  Though I know nearly no details, this potential bidder had an NOL vehicle which could have theoretically been used to acquire.  And still, they passed because they couldn't make the economics work.  Asset cost basis / implied tax liability was a big concern.

 

That is fine and all, but this isn't exactly something new. Without debating the merits of the announced results and/or effort that may or may not have been put into the process, it's hard to imagine that this is really all they were able to accomplish.

 

What you mention regarding taxation and what others have mentioned on the obscurity of certain assets is true. But everyone's already known this for an eternity and if anything, this was likely what a genuine strategic review was supposed to help clarify. Yet after a nine month process, one in which Deutsche Bank didn't even get paid for, they come back to us and pretty much tell us that outside of two undesirable merger parties, there are zero options on the table outside of continuing the current strategy. That is inconceivable

 

What's inconceivable?  If the stock were at $28 and headed into a process, my guess is there'd be an announced transaction.  But if potential buyers determine the starting price is too high, maybe they don't bid, as they feel it won't be taken seriously.  I find that to be conceivable.  No position.

 

What's inconceivable is that the whole purpose of the review was to solve some obvious problems. There are multiple ways to go about this. One of which was an outright sale of the company. If a sale of the company in it's entirety was not the best option, there were many different avenues left to pursue. It is inconceivable that had those avenues been pursued honestly, that there would have been zero strategic action.

 

Although, again, behind the scenes there was a lot going on that most people just aren't aware of. I've heard enough with my own ears, not to mention from several very credible parties, that I'm very skeptical of the whole process, and the way they've conducted themselves following it just adds to that. When you have senior management telling shareholders "we're not really interested in selling the land because it'll be worth more in 2-3 years", "well, we're not going to retire stock because that would help our biggest shareholder", "we can't do anything with our income properties because we'd have to pay taxes", etc. and then you add in that the bank hired to run the process wasn't even getting paid? I mean come on. In order for anything to occur, let alone a sale, there have to be at least two willing parties. It was clear from day one these guys didn't really have any intention to sell. That's fine with me. What isn't is that they've refused to do anything else.

[BG2008]

Greg,

 

I think the rest of the board and I would like to know more of what you heard.  The more detailed the better.  We are all big boys on the board here and we can all make up our mind.   

 

"Although, again, behind the scenes there was a lot going on that most people just aren't aware of. I've heard enough with my own ears, not to mention from several very credible parties, that I'm very skeptical of the whole process, and the way they've conducted themselves following it just adds to that."  I want to know more detail about this. 

 

Thanks 

[Gregmal]

Greg,

 

I think the rest of the board and I would like to know more of what you heard.  The more detailed the better.  We are all big boys on the board here and we can all make up our mind.   

 

"Although, again, behind the scenes there was a lot going on that most people just aren't aware of. I've heard enough with my own ears, not to mention from several very credible parties, that I'm very skeptical of the whole process, and the way they've conducted themselves following it just adds to that."  I want to know more detail about this. 

 

Thanks

 

If people want more detail they can PM me however the gist of the "behind the scenes" stuff follows a similar timeline as the strategic review and the deterioration of the Wintergreen/CTO relationship.

 

During fall of 2015, Albright apparently tried making a stock based acquisition of a company in CTO's peer group called Forestar. Part of the reasoning was to dilute Winters and bring liquidity to the stock. He also thought Forestar was cheap enough to warrant the acquisition but part of the pitch was relieving the company of Winters' grip.

 

Winters lost it, which is when he submitted his proposal to start a strategic review process. This is also why he made the claims about the company hiding what's really going on from shareholders, and why he made claims regarding security law violations. To derail a heavily dilutive acquisition.

 

From December through February, certain executives began telling anyone who would listen that they wouldn't be able to sell the company because of taxes, illiquidity of the land, etc, and that the only reason Winters was becoming aggressive is because his fund was going to be forced to liquidate and he couldn't get out of his CTO position. Albright also unloaded a lot of stock right after the announcement of the review to further undermine the process. Watch the stock reaction from the days following Winters letter in late November, and then see it fall off a cliff the next several months even though most would think a strategic review would be a positive support for the company.

 

I was personally on the phone with John in early January as the stock was getting annihilated and I asked him what exactly the company was doing, why they seemed to be dragging their feet, and if they felt the need to do anything about the sad state of their stock. He basically said no. And that real long term shareholders would just have to hold on for a while until they can make "the problem" go away. "The problem" is the same code word they use when referring to "their big shareholder" when referencing why they won't buy back stock.

 

A month later I talked to a guy who "claimed" to have advised John on several deals and he outright told me "John thinks Winters is done, and his plan is to drag everything out, and force him to liquidate. They've even discussed buying back stock from Wintergreen, but John is lowballing the heck out of him".

 

Over the next couple months, and at the Annual Meeting, I ran into many more people with similar experiences. Everyone knew they were not looking to sell the company. Internal thought at CTO was if they could keep the Board for 2016, Winters would be out by 2017. The strategic review according to some, was designed to eat up three quarters of time, suppress the stock, and lock up any potentially hostile bidder with an NDA that supposedly took them through the next Annual Meeting.

 

Not only have I had a company executive straight out tell me the company is willing and ready to buyout Winters stock, but as mentioned, they've also said they will not be repurchasing large amounts of stock until he is gone. This is all very anti-shareholder and the reason many want them gone. They have no credibility and rather play games to preserve their jobs than roll up their sleeves and get to work for all shareholders.

 

If you ran a real sale process and the offers undervalued the company, why wouldn't you come out with a big buyback? Instead they said they'd accelerate their current authorization, but guess what? To no ones surprise, they didn't. Anyone at the Investor Day can attest to how nasty and hostile they are to shareholders.

[Gregmal]

I'll follow up on yesterday's post with some examples of why folks are weary and outright done with this group

 

This management group has consistently over promised and under delivered. They've regularly put themselves before shareholders.

 

Their guidance (non 14 prop sale) is off by a mile, yet even as recently as Dec 2, they've stuck to it and mislead investors. Call the Minto people, they'll tell you, January close. Even the local papers say January. If you've done your due diligence you didn't believe them anyway, but the fact they continue to purposely do this is absurd.

 

The accelerated repurchase. They never had any intention of completing it this year. They were called out on this. Again, as recently as Dec 2, they said they would have it done by year end. They will not even come close.

 

The Bayberry sale will not likely close this year, yet they've failed to reflect or update this information to investors.

 

They were told how to release information on the strategic review, yet went out of their way to release this in the most harmful way possible for shareholders(this after being lambasted for their deceptiveness at the investor day). Its kind of CEO 101 to announce a buyback after failing to sell the company during a strategic review. John Albright's response? Have the company buyback a measly 70,000 shares while selling nearly 20,000 of his own.

 

In early October they said they'd re-work the mineral estate deal(the first deal was largely said to be a sham from the get go). They said they'd have an update in "a couple weeks" on Dec 2. Dec 28? Nothing.

 

During the July call, they said they had a 1053 acre parcel that was being negotiated. It was presented as this would be wrapped up shortly. On Dec 2 it was revealed this fell apart and they didnt bother to tell anyone.

 

They dropped the REIT conversion idea without even mentioning it.

 

I've been personally, around May of this year, told the 24,000,000 in loans were acquired when the company was in a different financial state and that they would be liquidated shortly. It was said in July the loans would be disposed of promptly with the proceeds going towards "accretive investments". At the Annual Meeting, "accretive investments" was the term largely used for repurchasing stock. Since July, they have done nothing.

 

Its very easy because of this company's semi dark status up until about a year ago for them to hide things or continue to mislead everyone. That's why when they craft a narrative about why selling the company isn't possible, go out of their way to spread this and inexcusably bad mouth the company to important investors, and then they release results that mirror the exact narrative they've been building for over a year, I just kind of laugh.

 

 

[BG2008]

Gregmal,

 

Thank you for the detail.  It's very helpful. 

[odin]

Interesting info in 13D filed today.  Separately, CTO updated land sale progress.

 

"The Issuer's counsel responded, on behalf of Issuer, that because Wintergreen Advisers did not affirmatively represent that it is a shareholder of record, it would not be able to nominate directors to be voted on at the Issuer's 2017 annual meeting."

 

"In the same letter in which it disputed that Wintergreen had the authority to nominate directors, CTO offered to repurchase "all or a significant portion" of the 27.1% of CTO shares held by Wintergreen's Clients."

 

https://www.sec.gov/Archives/edgar/data/23795/000091957417000008/d7350492a_13d-a.htm

 

 

[Gregmal]

Interesting info in 13D filed today.  Separately, CTO updated land sale progress.

 

"The Issuer's counsel responded, on behalf of Issuer, that because Wintergreen Advisers did not affirmatively represent that it is a shareholder of record, it would not be able to nominate directors to be voted on at the Issuer's 2017 annual meeting."

 

"In the same letter in which it disputed that Wintergreen had the authority to nominate directors, CTO offered to repurchase "all or a significant portion" of the 27.1% of CTO shares held by Wintergreen's Clients."

 

https://www.sec.gov/Archives/edgar/data/23795/000091957417000008/d7350492a_13d-a.htm

 

This is the stuff they've successfully hidden from most people. With all the facts out there, I have a hard time believing anyone in their right minds is happy with these types of anti-shareholder actions. Even if one does not agree with or like Wintergreen, CTO shareholders are better off without the current group. Not because they aren't capable, but because they refuse to put shareholders first.

[mateo999]

Attaching my SOTP.  Doesn't scream "slap me in the face cheap".  I'm also trying to keep in mind IRR vs. upside given the slow nature of land sales.  Please let me know where I'm off base.

 

EDITED: corrected $106K in under contract proceeds to $106mm.

[BG2008]

Attaching my SOTP.  Doesn't scream "slap me in the face cheap".  I'm also trying to keep in mind IRR vs. upside given the slow nature of land sales.  Please let me know where I'm off base.

 

EDITED: corrected $106K in under contract proceeds to $106mm.

 

Under your mid case scenario, if you believe that they can eventually convert into a REIT and purge the taxes, then the Deferred tax liabilities go away which is a $10 difference.  The subsurface deal was done in Feb of 2016, probably the worst time to structure minerals deals in the last few years.  If you use the deal figure, then that's another $3 difference. 

 

Regarding IRR and etc.  Any thoughts on the fact that land does rot over time.  It tends to appreciate.  When there are less land parcels left over due to land sales, it tends to go for more.  That's part of the charm of owning real estate/land from the owners perspective.  You sit on it and it tends to appreciate over time (barring big 2008/2009 style great recession). 

 

Nonetheless, I find the John/Mark and David Winters dynamic absolutely toxic. 

 

 

[Gregmal]

Attaching my SOTP.  Doesn't scream "slap me in the face cheap".  I'm also trying to keep in mind IRR vs. upside given the slow nature of land sales.  Please let me know where I'm off base.

 

EDITED: corrected $106K in under contract proceeds to $106mm.

 

Under your mid case scenario, if you believe that they can eventually convert into a REIT and purge the taxes, then the Deferred tax liabilities go away which is a $10 difference.  The subsurface deal was done in Feb of 2016, probably the worst time to structure minerals deals in the last few years.  If you use the deal figure, then that's another $3 difference. 

 

Regarding IRR and etc.  Any thoughts on the fact that land does rot over time.  It tends to appreciate.  When there are less land parcels left over due to land sales, it tends to go for more.  That's part of the charm of owning real estate/land from the owners perspective.  You sit on it and it tends to appreciate over time (barring big 2008/2009 style great recession). 

 

Nonetheless, I find the John/Mark and David Winters dynamic absolutely toxic.

 

Agree on pretty much everything you said.

 

Regarding the last piece, perhaps I can add some color. Take it with a grain on salt.

 

I've had personal, one on one interaction and communications with all three.

 

-Albright is incredibly bright, but an arrogant schmuck whose communication skills leave a lot to be desired. He's quietly deceiving, nasty when he gets push back, and always seems to be looking out for himself. Given how much money he makes, I don't believe for a second he needs to keep selling his stock every other week to pay off a margin account.

 

-Patten is a very genuine, nice guy. Through my most recent talks with him, I've gotten the feeling(just my interpretation) that he is kind of disappointed in the fact he is likely to lose his job over this Albright/Winters debacle. He gets a lot of whats going on, and given his qualifications, if anything IMO, is underpaid for the work he does. I wouldn't care if he were interim CEO til a replacement is found.

 

-David Winters is an interesting fellow. A little eccentric on top of being somewhat anti-social but all in all a very nice guy who seems to shoot straight. His performance often gets ridiculed, but he's cut from a certain type of value investor cloth. He's not afraid to stick to what he knows and doesn't really have any interest in chasing what's currently popular in search of performance. IMO he's kind of a Bruce Berkowitz but where Berkowitz tends to finds his way into "value" assets most initially view as outrageously risky and speculative, Winters finds good old conservative "value" staples to be his thing. The style and approach is basically the same though. Fitting their JOE/CTO positions and scenarios are almost mirror images.

[odin]

Has anyone considered the implications of the 9.8% REIT ownership limitation re: Winters stake?

 

From my very brief research it appears the 9.8% is the typical level adopted in REIT charters (not mandated by the IRS) to prevent five persons from owning more than 50% of the shares (required by IRS).  I found this interesting...

 

"Publicly traded REITs protect their REIT qualifications through, among other

ways, specific ownership limits in their charters. A typical ownership limit will

prohibit anyone from owning in excess of 9.8% of the REIT’s outstanding stock.

The ownership limit is designed to protect the REIT’s ability to meet what is

commonly referred to as the 5/50 test – essentially five or fewer individuals may

not own more than 50% of the stock during the second half of any year. By

prohibiting any one holder from owning more than 9.8%, it is impossible for any

five to reach 50%. A stockholder whose share ownership surpasses the limit will

have its shares automatically converted into “excess stock,” i.e., shares are

effectively confiscated from the shareholder and held in trust for the benefit of

some designated charity until the shares are sold in the marketplace."

 

 

[bizaro86]

Has anyone considered the implications of the 9.8% REIT ownership limitation re: Winters stake?

 

From my very brief research it appears the 9.8% is the typical level adopted in REIT charters (not mandated by the IRS) to prevent five persons from owning more than 50% of the shares (required by IRS).  I found this interesting...

 

"Publicly traded REITs protect their REIT qualifications through, among other

ways, specific ownership limits in their charters. A typical ownership limit will

prohibit anyone from owning in excess of 9.8% of the REIT’s outstanding stock.

The ownership limit is designed to protect the REIT’s ability to meet what is

commonly referred to as the 5/50 test – essentially five or fewer individuals may

not own more than 50% of the stock during the second half of any year. By

prohibiting any one holder from owning more than 9.8%, it is impossible for any

five to reach 50%. A stockholder whose share ownership surpasses the limit will

have its shares automatically converted into “excess stock,” i.e., shares are

effectively confiscated from the shareholder and held in trust for the benefit of

some designated charity until the shares are sold in the marketplace."

 

My understanding is that the usual way around that is for the assets to go into an operating partnership, and give the pre-existing holder with >10% ownership a direct interest in the operating partnership. Make the OP interest convertible into REIT shares if they ever want to sell. That set up also allows the REIT to trade operating partnership interests to property owners, which I believe qualifies for a like kind exchange, allowing the property owners to use a 1031 exchange and defer taxes, so potentially gives them an advantage in acquiring property.

[InelegantInvestor]

CTO settled to the extent that it is allowing Wintergreen to run its nominees on its own proxy. http://finance.yahoo.com/news/consolidated-tomoka-announces-settlement-litigation-141500031.html

 

Also, more color on what Minto is doing with the acreage they are buying from CTO.

http://nypost.com/2017/03/06/jimmy-buffet-announces-retirement-community-venture/

http://www.news-journalonline.com/news/20170216/jimmy-buffett-community-coming-to-daytona

 

Of course, this is not the first time a Buffett has been involved in CTO

http://articles.orlandosentinel.com/1999-08-11/business/9908100468_1_fentress-buffett-tomoka

[Gregmal]

A lot of interesting things much to the tune of what I mentioned here some time ago, starting to come to light as the proxy fight wages on.

https://www.sec.gov/Archives/edgar/data/23795/000091957417003397/d7461149_dfan14-a.htm

 

"In 2015, Mr. Albright informed Wintergreen that CTO intended to pursue a hostile takeover of Forestar, a Texas real estate company of approximately equivalent size to CTO and sought Wintergreen's support.  Under this plan he could return to his home state and live in Dallas"

 

"In phone conversations Wintergreen had with Deutsche Bank after the strategic review, we learned that Deutsche Bank described the process as merely an accommodation to a client with whom they had an existing relationship.  This was not the strategic review envisioned by our shareholder proposal."

 

A half assed strategic review after Albright's plan to buy Forestar so he could work from home gets thwarted... Yuck.

[Gregmal]

Figured i'd update here.

 

We now have 72% of land under contract and likely to close within a two year window.

 

The company has finally, and begrudgingly put out a NAV sheet in their latest presentation and you essentially have a conservative value of $80 a share plus over 1,000 acres and a lot of free call options.

 

Additionally, it was said that a potential REIT conversion would ignore the 1031 deferrals on a pass through basis and eliminate them after a 5 year holding period. This is a massive plus as the tax implications for shareholders on a $36 distubtion would be far higher than on a $7 distribution. The company still seemingly wants to do this with 80% stock; something that IMO is very anti-shareholder. Stop the selfish kingdom building crusade and pay some of it back to shareholders. 

 

Nonetheless I see a worst case downside here of maybe $5-$8 a share and only on a temporary basis versus what looks like a fairly straight forward 35-40% return over the next 24 months or so. The end game is and always has been that Albright sells most if not all of the land and then flips this to a REIT if there is still a big discount, or in the event the discount fades, gets to run his own personal REIT while being the king of Daytona.

 

[Gregmal]

Round 2

 

https://www.sec.gov/Archives/edgar/data/23795/000155837017009066/f8-k.htm

 

At this point I think it is a win/win. These guys definitely deserve to be ridiculed for their inaction; especially after the way they conducted themselves during last years proxy. They've done nothing new to narrow the discount to NAV, all but stopped share repurchase activity despite clarity with the land sales and a $81-$91 NAV figure, and more or less been proven wrong regarding all of their fear mongering from the past few years. How long can they cry "it's all his fault, he's desperate"? They've been saying this now for three years. They've taken no responsibility for the poor performance, and made little effort to do anything other than convert this to a REIT while claiming that they haven't made a decision on the REIT conversion. If there is any sort of justice in the world, these guys should face repercussions for all the nonsense they've pulled since 2015.

[BeerBBQ]

What has changed? Why would winters have a better chance of winning now? Has shareholder base turned over?

[Gregmal]

To me it is the clarity in terms of value and a lot of shareholders realizing that they were hoodwinked. Right now, the valuation is much more certain than ever before. And at worst we're probably looking at a two year window for all of that cash to come in.

 

72% of remaining land under contract for ~150m. Basically there are only about 2,000 acres of largely prime land left whereas last year there were over 10,000 acres of wildly varying land parcels

 

The fact Wintergreen is only seeking 3 directors which would not constitute a change in control. There has to be a point where crying "he's desperate and wants to sell" becomes trite. They've been doing it for years and he's still here and has only added to his position.

 

The fact that the current Board has refused to buyback stock despite the continued underperformance and profound discount to NAV. This despite making all sorts of claims and insinuations during last year's proxy fight. They pretty clearly did what they had to do to win, and then immediately reverting back to the behavior that got them in trouble to begin with.

 

Much of the shareholder base last year just didn't think giving Winters complete control of the company was worth the risk. There was validity to that. But that certainly didn't mean they were thrilled with management or happy with the board. Quite the opposite. Now they can put a couple Wintergreen directors on the board without fear of a quick sale or the egregious change in control provisions kicking in. One of the biggest tells for me was that one of the first things the current board did following the proxy fight was change managements employment contracts so that in the event that what had just occurred happened again, big golden parachutes would kick in. And to make matters worse they substantially increased the amount of money management would get paid if they chose to quit for the newly revamped "cause".

 

 

[zippy1]

Consolidated-Tomoka Completes Sale of Approximately 27 Acres for $6.2 Million to North American Development Group

Consolidated-Tomoka Land Co. (NYSE American: CTO) (the “Company”) today announced the closing of the sale of approximately 27.04 acres to an affiliate of North American Development Group (“NADG”) for approximately $6.2 million, or approximately $230,000 per acre (the “Fourth NADG Land Sale”), which includes a reimbursement payment of approximately $580,000 from NADG for the pro-rata portion of the infrastructure costs incurred by the Company relating to the Tomoka Town Center. The land is located on the east side of Interstate 95 and is in the Tomoka Town Center. The estimated gain on the Fourth NADG Land Sale, including the aforementioned reimbursement, is approximately $4.6 million, or approximately $0.52 per share, after tax. The Company intends to utilize the proceeds from this sale to fund a portion of the previously acquired income property located near Portland, Oregon leased to Wells Fargo, through a reverse 1031 like-kind exchange structure. The closing of the Fourth NADG Land Sale leaves NADG with approximately 35.0 acres of additional land remaining under contract with the Company for approximately $11.5 million, or approximately $329,000 per acre. NADG has until year-end 2018 to close on the remaining acreage under contract. NADG has begun vertical construction of its approximately 500,000 square foot retail power center in Tomoka Town Center.

 

Including the Fourth NADG Land Sale, year-to-date, the Company has sold approximately 1,700 acres of land for an aggregate sales price of approximately $45.5 million, or nearly $27,000 per acre. The Company’s guidance for 2017 regarding total land sales was approximately $30 million to $50 million.

https://finance.yahoo.com/news/consolidated-tomoka-completes-sale-approximately-141000581.html

[Cardboard]

Looks like another victory or on the way to be for Gregmal! Congratulations!