RE: I say we should tender + why we shouldn'tSorry but I can not agree with your recommendation not to tender. Centerfund is poorly managed. Nobody can be happy with the way this stock has performed.
(The way the stock has performed is more an impression of market forces. They have an incredible dividend at current levels, which when taxes are taken into account is actually higher than most of the REITs you mention. The company has been buying back shares as the price has fallen so you really can't say they haven't done anything.)
Here is the reasons for suggesting we tender:
1.This stock was hitting a new low prior to the RIOCAN offer even though other REITs were trending up.(centrefund is not a reit, it should be compared to other dividend paying real estate stocks like trizechan-spelling?? they are completely overhauling the company and the share price really hasn't moved)(also the market has a tendency not to fully value real property stocks- IMN- inmet mining is a good money maker- still hitting fresh lows- make sure you invest in good companies rather than the markets' latest fad.
2. The Centrefund debenture was trading at 70 cent on the dollar prior to the RIOCAN offer. That a 15% yield, which indicates the company has problems or is not financially smart enough to buy back high cost debt. (Aren't they buying back 10% of the outstanding debt too?? Look at the covenants on some of those debentures, some of them are really nasty- for example- one states that the company can pay back the debt after 2002 with shares at $11. Maybe this would be a reason that they have dropped so severely. IMO they actually made this particular debenture so that it benefits the company in the case that shares fall in price, although it should be mentioned that the others aren't as nasty-look at the final couple pages of the last year end report)
3. I spoke to the investor relation guy and although he was nice and friendly, he must have been the most green of all the IR people I have ever spoken to. Perhaps this is good that they don't perceive IR to be important but somehow I think it shows management's lack of ability to properly run the company.
(I can't comment on this as I have never contacted the company via phone. I think this is very individual as I just contacted Noranda and got a bitter response- and they are not a bad company because of my interation with one of their employees)
Given the above, the choices are to sell at current levels or tender. Before the offer the stock was $8.00 and is now at $9.50. Therefore the market is pricing in around 60% at $10.50 and 40% at $7.50. More than likely we should get more than 7.50 for the balance so tendering is a better alternative.
There is no shortage of REITs which are far better managed than Centrefund. Take the proceeds and buy those such as Summit, RIOCAN, Legacy, etc....
(I agree that investing in these REITS in a good option- but you can't compare REITs with other property companies. REITS don't pay taxes- regular company's do.
I hope that a lot of investors refuse to sell, then I will get more away at the higher price and I will pick it up when it falls later in the year. Centrefund is only a buy when it is cheap. Remember, this is not a properly run organization.
Let me know if you disagree with anything I have said.
If you tender at this price you are likely to be taking a loss if you are a long time holder in the company. Your other option is to hold and see what the future holds for you. I'm sure that no one is complaining about the dividend yield, and the company is not having financial problems, so sit tight.
Disclosure- just so you know- I am not a big holder in CFE- <500 shares at the moment. I was involved with them more a couple of years ago prior to the shares goin over $20. IMO we should all sit tight and let the chips fall as they may.