The Oak Brook, IL-based shopping center operator will be bought by DRA, an investment advisor based in New York City, for $10.60 per share in cash.
The deal, which is expected to close in the first half of 2016, is worth about $2.3 billion. The deal is a 6.6% premium to Inland's closing stock price on December 14.
"The board has been focused on the options available to address the long-term discount at which the company's shares have traded versus private market valuations and its shopping center REIT peers," Thomas P. D'Arcy, non-executive chairman of IRC, said in a statement on Tuesday morning. "The board unanimously believes this all-cash offer is the best course of action to address this valuation gap and provide our stockholders with strong relative value for their investment."
So far today, 4.47 million shares of Inland have traded, versus its 30-day average of about 680,000 shares.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate INLAND REAL ESTATE CORP as a Hold with a ratings score of C+. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and poor profit margins.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 168.2% when compared to the same quarter one year prior, rising from $4.58 million to $12.27 million.
- Net operating cash flow has significantly increased by 67.96% to $24.07 million when compared to the same quarter last year. In addition, INLAND REAL ESTATE CORP has also vastly surpassed the industry average cash flow growth rate of 9.39%.
- IRC, with its decline in revenue, slightly underperformed the industry average of 6.1%. Since the same quarter one year prior, revenues slightly dropped by 1.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, INLAND REAL ESTATE CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for INLAND REAL ESTATE CORP is currently lower than what is desirable, coming in at 32.91%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 24.42% trails that of the industry average.
- You can view the full analysis from the report here: IRC