Corrections Corp. of America is front and center in a Sunday New York Times story about the growing corporate trend of converting from a standard corporation to a real estate investment trust.
The Nashville-based prison operator (Ticker: CXW) expects to save $70 million on a REIT conversion in 2013 and recently announced a $675 million special dividend payout to shareholders, or about $6.63 per share.
One industry analyst tells the Times the interest in REIT conversion is the highest it’s been in 30 years. Another analyst says he expects more conversions to come in railroads, highways, mines, landfills, vineyards, farmland or other immovable structures that generate revenues.
The tax savings and potential benefit to shareholders of REIT conversions can’t be denied, but the trend worries some industry experts. Some think it could jeopardize the tax status of traditional trusts, while others question the need for more tax-saving strategies for corporations when there are already so many available.
Analyst Thomas Carroll at Stifel Nicolaus on Friday raised his price target for shares of Healthways to $19 from $13 after the Franklin-based provider of wellness programs reported a smaller-than-expected first-quarter loss. Healthways shares (Ticker: HWAY) popped big Friday, regaining the ground they had lost over the previous six weeks. To get to Carroll's new target — which is the highest on the Street — the shares would have to return to late-2009 levels.
Despite upping its bid from $138.7 million to $200 million at the last minute, Duke LifePoint has lost out on the rights to run a Florida hospital for the next 40 years.
The Post reported last week about a bidding war over Munroe Regional Medical Center between Duke LifePoint, a joint venture of Duke University and Brentwood-based LifePoint Hospitals, and Florida-based Health Management Associates.
Late last week, the hospital’s board of trustees voted 6-1 in favor of HMA’s bid. One trustee told the Star Banner, Ocala’s daily newspaper, that he voted for the HMA deal because the company had a stronger footprint in the Sunshine State. The trustee said he was afraid Duke LifePoint would pay more attention to hospitals in states, such as North Carolina, where it oversees more facilities.
HMA also sweetened the pot at the last minute with an offer to invest $1.5 million in the Ocala community.
Ryman Hospitality Properties has wrapped up the big refinancing that increases its main debt facility to $1 billion from $925 million and pushes its maturity from August 2015 to April 2017. The new package has more revolving debt — $700 million versus $525 million — and lowers its rate by 25 basis points.
“This refinancing of our bank credit facility, coupled with the recent completion of our senior notes offering, further strengthens our balance sheet and enhances our flexibility to take advantage of strategic growth opportunities moving forward,” said Chairman, President and CEO Colin Reed. “Given the extremely attractive rates at which we were able to complete these transactions, we are confident that the timing was right and that they are in long-term best interest of our Company and our shareholders.”
Analyst Paul Sankey at Deutsche Bank has slashed his price target for shares of Delek US Holdings and several other refining stocks, saying the industry's fundamentals are no longer as positive. Sankey now sees Delek — which has run from $15 to $34 in the past year — climbing to $38 instead of $48. In his note, he said counting on exports to pick up the slack from weaker demand is a risky move.
- ALEX B FRUIN INHERITANCE TRUST; CANDACE F STEFANSIC INHERITANCE TRUST; CANDANCE F STEFANSIC INHERITANCE TRUST; FRUIN, ALEX B TRUSTEE; FRUIN ALEX B INHERITANCE TRUST; STEFANSIC, CANDACE F TRUSTEE; STEFANSIC CANDACE F INHERITANCE TRUST; STEFANSIC CANDANCE F INHERITANCE TRUST
- ROSS, BRIDGETT D
- COOKE, ETHEN LANYARD TRUSTEE; COOKE, ETHEN LEWIS ESTATE
- JACOBS, JESSICA ALEXANDRA; JACOBS, ERIKA BESS