BRE Properties Inc. dismissed a USD4.6 billion takeover deal. The dismissal highlighted the discount valuation of the apartment landlord. It also showed that it may stir investors to push for a sale.
In July, Land & Buildings revealed that a bid for BRE would dismissed persistent undervaluation of the company. The company's stock had returned about 71% including dividends. This was after Chief Executive Officer Constance Moore assumed position last 2005. A compiled data from Bloomberg showed that BRE traded 13% below its properties' value. This was even worse compared to the 6.3% Essex discount.
BRE was seen by investors to be poorly managed. This was due to divergence seen between BRE and Essex. According to Bank of Montreal, a sale from BRE might aid to resolve the conflict. Furthermore, the bank also said that the BRE takeover deal is no longer possible even if Land & Buildings doesn't have enough finances to fuel the offer. Citigroup Inc. said that the takeover bid had raised BRE's profile but had put more pressure on the firm's management to consider the sale.
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