Analyst Ratings
Kite Realty Prices Stock Offering, Shares Slump
The Associated Press
05/13/09 - 01:27 PM EDT
INDIANAPOLIS (AP) Shares of Kite Realty Group Trust plunged Wednesday after the real estate investment trust, which primarily develops shopping centers, priced a stock offering at a steep discount.
The company said early Wednesday that it would offer 25 million shares at a price of $3.20 apiece 20 percent below the stock's $4 closing price on Tuesday.
Shares dropped 85 cents, or 21.3 percent, to $3.15 in afternoon trading Wednesday.
The company has given the underwriters the option to buy up to an additional 3.75 million shares to cover any overallotments.
Net proceeds from the offering are expected to be $76.6 million, or $88.1 million if the underwriters exercise their overallotment option in full. Kite said it plans to use the proceeds from this offering to repay debt and for working capital and other general corporate purposes.
Tuesday, the Indianapolis-based company lowered its forecast for the remainder of the year to take into account the stock offering. Kite now expects 2009 funds from operations between 65 cents to 72 cents per share, down from previous guidance of 83 cents to 93 cents per share. Analysts surveyed by Thomson Reuters expect full-year FFO of 83 cents per share, on average.
Funds from operations, or FFO, adds such items as amortization and depreciation to net income. It is considered a key measure of REIT strength because it gives a more accurate picture of cash performance.