UPDATE 1-Post Properties drops sale attempt after no offers
Wed Jun 25, 2008 4:36pm EDT
(Adds dateline, analyst quote, share price, byline)
By Ilaina Jonas
NEW YORK, June 25 (Reuters) - Post Properties Inc (PPS.N: Quote, Profile, Research, Stock Buzz), the subject of numerous buyout discussions over the past couple of years, said on Wednesday it was ending a selling process after it received no definitive offers after five months.
The apartment owner cited difficult market conditions and said all potential bidders have withdrawn from the sale process.
It also said its board reaffirmed its commitment to pursue other strategies to "enhance shareholder value."
"We conducted an open and thorough sales process, but conditions in the economy and the financial markets combined to produce a difficult transaction environment," David Stockert, the company's president and chief executive officer, said in a statement.
Atlanta-based Post Properties said it would look into selling some buildings and using the funds to repay debt and possibly a special dividend. It also is exploring cutting costs by reducing overhead, development and property management. It also may exit some markets and would explore construction loan financing and joint venture equity to fund development.
The company owns 22,437 apartment units in 62 communities.
On Monday Stifel Nicolaus analysts Rod Petrik and Simon Yarmak downgraded the shares to a "hold" from a "buy," anticipating the company would not be able to find a buyer.
"Our downgrade is predicated on our belief that there is no near-term catalyst for Post shares," the analysts wrote in a research note. "If the company announces there is no sale, we believe the share price will continue to feel downward pressure. We believe any change in management will need to come with a new business plan and vision for the company."
Shares of Post Properties on Wednesday closed up 15 cents at $33.01, within sight of its 12-month low of $30.13 reached on Jan. 8. Nearly a year ago, the shares sold for $53.37. (Editing by Braden Reddall)
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