STOR to be acquired...

Store Capital Corp. , a Scottsdale, Ariz.-based real estate investment trust, said Thursday it has agreed to be acquired by Singaporean sovereign fund GIC and Oak Street in an all-cash deal valued at about $14 billion. Oak Street is a unit of Blue Owl, a net lease investor. Under the terms of the deal, Store Capital shareholders will receive $32.25 per each share owned, equal to a premium of 20.4% over the stock’s closing price on Wednesday, and a premium of 17.8% over the 90-day volume weighted average stock price through that date. The deal is expected to close in the first quarter of 2023. The agreement includes a 30-day “go-shop” period, during which Store Capital can solicit competing bids. Shares were halted premarket for the news, but are down 22% in the year to date, while the S&P 500 has fallen 17%.

John
Long STOR

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I believe Warren E Buffet {Berkshire} & BlackRock are major owners of STOR:

https://money.cnn.com/quote/shareholders/shareholders.html?s…

Either entity could easily outbid the announced buyout.

sunrayman
small shareholder of STOR

But would they want to?

Motley Fool’s Jason Hall posted his thoughts about this development via a 5 minute video:

https://www.fool.com/investing/2022/09/15/store-capital-stoc…

He seems to think the odds are good that another offer will be made during the 30-day “go shop” period. But its hard to beat an all cash offer requiring no financing. Who knows?

I don’t consider the current buy-out offer to be very generous at a forward P/FFO of around 15.

David
Long STOR, and sorry to see it go.

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Hi David, no answers here but I sold pretty much after it was announced. It seems way too hard to play arbitrage in these kind of things and getting some cash as the market feels very risky is not a bad thing. I will be looking for a new investment and I need to decide if a REIT is the best thing to reinvest in.

Randy

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I will be looking for a new investment and I need to decide if a REIT is the best thing to reinvest in.

Hi Randy!

I will wait for the expiration of the 30-day “go shop” period to see what transpires as Jason Hall has suggested. But I understand your position and find nothing wrong with it.

Good candidates to consider and research for your proceeds (and mine, eventually), include FRT, NTB and SPG. Two REITs and an interesting bank. SPG is firing on all cylinders and pays a handsome and growing 7% dividend. I do not own any of them but they are on my watch list.

David

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I don’t buy many reits but coat tailed Ted from Berkshire into this with a good sized position w/average cost around $26. I read that he sold the entire position a while back but couldn’t see a good reason so held on. I will hold through the “go shop” unless Berkshire drops to around $260, if so I’ll sell and add to my Berkshire.

Today, STORE Capital increased their Quarterly Dividend by 6.5% to $0.41 Per Share. It will be payable Oct 17 to shareholders of Record on Sept 30, 2022.

sunray

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Thanks David, I have and like NTB, I will look into the others.

As a trade of stocks we like, I have quite a bit of BRT. A growing apartment complex REIT that focuses on buying and upgrading apartment complex in the southeast and other growing markets). And then sometimes sell fully priced complexes to buy another “fixer upper” complex. Not cheap but they have been growing FFO for quite a while now and the stock has followed suit over the years.

Randy

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Thanks, Randy, I’ll take a look at BRT!

BRT got a little less expensive today, along with a lot of other REITs.

David

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