Sizeler Board Rejects Compson's Buyout Offer

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KENNER, LA-After weighing a counter offer, Sizeler Property Investors Inc. is standing behind its plan to sell the company–lock, stock and barrel–to Toronto-based Revenue Properties Co. Ltd. and its majority owner, Morguard Corp.

According to this morning’s press release, Sizeler’s board of directors unanimously has determined that the revised bid from Boca Raton, FL-based Compson Holding Corp. “is less favorable” to its stockholders than the $324-million merger with Revenue Properties. Neither side was available to comment prior to publication time, but the upshot of the release is Sizeler intends to follow through on the in-place merger plan. The release says a proxy statement will be forthcoming “shortly” that will provide details about the evaluation.

The review validates what Compson president Michael Comparato previously told GlobeSt.com–that it wants the real estate, but not Sizeler stock or liability. As a result, Sizeler would “be responsible for a substantial amount of liabilities and expenses that must be paid as a result of a liquidation and wind down of the company.” Comparato has been unable to comment while Sizeler reviewed the offer.

Sizeler’s evaluation also shows Compson’s latest proposal effectively is worth $15.60 per share to stockholders, without allowances for liquidation or winding down expenses. With that factored in, Sizeler’s board claims the per share price dips to $15.

Sizeler also claims the deal would require a portion of Compson’s cash to be placed into a three-year reserve for contingencies. Also subject to criticism is the time that it would take for definitive documentation, which company execs say they “believes would create risk for completion and timing of the transaction.”