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Cogdell Spencer Announces Offering, Cuts Dividend

The Associated Press

CHARLOTTE, N.C. (AP) — Real estate investment trust Cogdell Spencer Inc. said Tuesday it will nearly double its shares outstanding through a stock offering and will slash its dividend.

Cogdell Spencer plans to sell 18 million shares of common stock. As of May 5, the company had roughly 19 million shares outstanding, according to a filing with the Securities and Exchange Commission.

Shares of the company fell on the news, losing 83 cents, or 19 percent, to $3.50 in aftermarket trading. Earlier, the stock finished the regular session up 4.3 percent at $4.33.

The proceeds will fund the $50 million repayment of a term loan and will help reduce borrowings under the secured revolving credit facility and for working capital.

Underwriters will have an option to purchase up to an additional 2.7 million shares.

The underwriters have reserved for sale by the company at the public offering price up to 1 million of the shares in the offering for David J. Lubar, one of the company's directors.

The shares of common stock sold to Lubar will not be subject to any underwriting discount.

Charlotte, N.C.-based Cogdell Spencer also announced it would cut its dividend payments by more than half to 11 cents per share for the second, third and fourth quarters of this year. The dividend payments assume completion of the stock offering, the company said. The payments are down from the current payout of 22.5 cents per share.

The reduction helps "maintain financial flexibility in light of the current state of the capital markets."

It also takes into account the payments for the increased number of shares of common stock and operating partnership units expected to be outstanding upon completion of the public offering.