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Aimco (AIV) Rejects Takeover Bid, Remains on Track With Spin-Off

Apartment Investment and Management Company AIV, commonly known as Aimco, was recently approached with an all-cash takeout offer by Westdale Real Estate Investment and Management for an undisclosed price, Bloomberg reported.

Following this, yesterday, Aimco confirmed receiving “a conditional non-binding indication of interest” for a takeover. Nonetheless, the company’s board of directors unanimously rejected the bid on grounds of the proposal being “grossly inadequate and not in the best interest of Aimco and its stockholders”. Moreover, Aimco confirmed that the scheduled separation of Aimco and Apartment Income REIT Corp (“AIR”) remains on track.

Investors have likely taken this news positively, with shares of Aimco rising 3.6% in yesterday’s trading session. Notably, the spin-off will facilitate the company to simplify its business, and focus on a pipeline of redevelopment and development opportunities as well as additional scope to pursue real estate opportunities in partnership with AIR.

In fact, the company remains on track with the spin-off of AIR from Aimco through a 1:1 pro rata distribution of share of Class A common stock of AIR for every share of Class A common stock of Aimco. The distributions are anticipated to be completed before trading hours on Dec 15, 2020,to shareholders of record as of Dec 5, 2020.

Additionally, Aimco’s 2020 property sales, including stake sale in its California properties, resulted in taxable gains in excess of its regular quarterly dividend. This enabled its board of directors to announce a special dividend amounting to $8.20 per share in the form of cash and stock. This special dividend includes the upcoming two quarterly cash dividends, aggregating 82 cents per share and $7.38 per share in stock.

Accordingly, the company paid out $121.8 million in cash and 35,386,723 shares of common stock on Nov 30, 2020, in the special dividend to shareholders of record as of Nov 4, 2020.

In efforts to offset the dilutive impact of the stock issued in the special dividend, the company’s board also authorized a 1-for-1.23821 reverse stock split, effective Nov 30, 2020. This will result in the total shares outstanding remaining unchanged.

Shares of this Zacks Rank #3 (Hold) company have plunged 38% over the past year, wider than the industry’s decline of 19.9%.


Stocks to Consider

Innovative Industrial Properties, Inc.’s IIPR funds from operations (FFO) per share estimates for 2020 have been revised upward by 5.8% to $5.11 over the past month. The company carries a Zacks Rank of 2 (Buy), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Life Storage, Inc.’s LSI Zacks Consensus Estimate for 2020 FFO per share has moved up marginally to $5.82 over the past month. The company currently carries a Zacks Rank of 2.

City Office REIT, Inc.’s CIO Zacks Consensus Estimate for 2020 FFO per share has improved 5.3% to $1.20 in a month’s time. The company holds a Zacks Rank of 2 at present.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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