Thursday, July 19, 2012

Flying Without A Parachute

Healthcare Trust of America's (HTA) tender offer period expired yesterday, ending the stock's price support.  HTA had offered to purchase up to $150 million of shares at a price range of $10.10 to $10.50.  As expected, the tender offer was oversubscribed, and HTA will purchase $150 million of shares at the $10.10 per share.  (It's time to end these silly Dutch Auction tender offers, which offer a price range for buying tendered shares, but then always fulfill the tender offer at the lower price.)

I wasn't shocked that the HTA tender offer was oversubscribed, but was surprised that a greater number of investors didn't seek to tender their shares.  According to HTA's press release filing this morning, 22.86 million shares were tendered and 14.85 million shares were accepted.  Stated another way, 39.9% of HTA's Class A shares were tendered.  The total tender offer was for 25.9% the the outstanding Class A shares.  I thought that with HTA's distribution cut prior to the listing, the number of investors seeking to exit HTA via the tender would have been higher.  HTA's stock price is down, but stable, this morning, and volume is near normal.

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