Inland American Extends Tender Offer

Inland American Real Estate Trust (Inland American), a non-traded REIT that previously announced a tender offer of up to $350 million worth of its outstanding shares has extended the offering period two more weeks. Stockholders now have until 5pm EST, April 25, 2014 to tender all or a portion of their shares.

As of April 11, 2014, 50,443,108 shares were tendered. 

Inland’s original announcement offered between $6.10 and $6.50 per share with the purchase price being the lowest price that will enable the Company to buy up to $350 million in value of its shares. The Company is allowed to increase the number of shares accepted by up to 2%, which could increase the value of the offer by $120 million.

At $6.10 with 50,443,108 shares being tendered, that’s over $307 million tendered and only about $43 million still available.

There was no mention of increasing the number of shares accepted in today’s announcement.

In a separate letter to shareholders, Inland American recaps the company’s recent moves to improve its financials and overall portfolio.

The letter explains that the REIT terminated its agreement with its business manager and hired the business manager’s employees. In addition the REIT acquired the assets of the business necessary for daily operations.

The REIT also agreed to take over its property management functions by the end of 2014.

Inland American has not and will not pay a fee for either of these transitions.

The switch eliminates the quarterly advisory fee paid by the REIT and, according to the letter, Inland American expects “that becoming self-managed will positively impact our net income and funds from operations.”

Inland American’s move to self-management and their tender offer are both indicative of a liquidity event sometime in the near future. As of December 31, 2014, the company’s portfolio consisted of 277 properties and $9.7 billion in assets.