Non-traded REIT, Inland American Real Estate Inc. recently issued a letter to its stockholders announcing that it will purchase back shares of the Company’s common stock up to $350 million. This announcement comes not long after Inland American revealed that it has become self-managed, which is indicative of a potential liquidity event.
The offer is open until April 11, 2014 and shareholders may tender all, a portion, or none of their shares. The Company refers to the method of repurchasing as a modified “Dutch Auction” because shareholders tender their stock themselves within a stated price range.
The price per share will be between $6.10 and $6.50 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.
Inland American Real Estate has a large portfolio of commercial real estate consisting of 277 properties. It is one of six REITs that are or have been sponsored by the Inland Real Estate Group of Companies.
Its aggregate distributions in 2013 totaled $449.3 million, which is equal to $.50 per share.