Nearest Resistance: $23.50
Nearest Support: $21
Catalyst: Buyout Bid and Share Offering
It's been an eventful week for small-cap industrial landlord
; shares of the trust have rallied more than 45% since Monday's close. The catalyst? A buyout offer for $27 per share.
But there's more to the story than meets the eye. CWH snubbed the buyout offer by going forward with a share offering yesterday to raise $570 million. Management thinks they have more upside in pursuing strategic alternatives themselves rather than biting on the acquisition offer, and the $4 spread between CWH's current price and the buyout price is the risk that they'll fall short. If nothing else, this week's drama puts a lot more eyes on this small real estate investment trust. While headline risk is still big for CommonWealth, I'd look at a move through $23.50 as a short-term buy signal.
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-- Written by Jonas Elmerraji in Baltimore.
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