Stockert Kills Rumor on Post's Sale/Merger

ATLANTA-After weeks of speculation by some Wall Street analysts that Post Properties Inc. could be on the selling block, company CEO/president David Stockert closed the door Tuesday on those rumors.

“We have not received any proposals or engaged in any form of discussions, preliminary or otherwise, regarding a possible sale of the company or a management-led buy-out,” Stockert says in a prepared statement. “Any reports to the contrary are inaccurate.”

Stockert says he addressed the issue because “we believe we must respond to recent media reports speculating that we are considering a sale of the company…It is our normal policy not to comment on market rumors regarding the company.”

GlobeSt.com reported those rumors Nov. 7. At that time, Stockert neither confirmed nor denied their accuracy. He said the issue would be reviewed at a Nov. 12 directors’ meeting.

Stockert and the company’s nine directors, however, did act on other Wall Street speculation that Post would cut its dividends after a gloomy nine-month performance. Post will be trimming its quarterly 78-cents dividend by 42.3% to 45 cents per share beginning in first quarter 2003, Stockert says in the statement. The first-quarter 2003 reduction equates to a $1.80 annual dividend versus $3.12 currently.

Post directors will continue to calculate the dividend amount each quarter. “Given our expectations for the multifamily industry in 2003, we feel that adjusting the dividend to a level supported by the company’s expected cash flow is a necessary step to maintain the strength of our balance sheet and to enhance the company’s prospects over the long run.”

Stockert says reducing the dividend “will free up approximately $55 million in 2003, which we will use to fund our limited development pipeline and to reduce indebtedness.”

Post has about $86 million left under a previously announced $200 million stock repurchase program. “Given our current share price ($23.29) , we also expect to opportunistically repurchase shares,” Stockert says.

“As previously announced, we believe that funding a portion of our dividend through strategic asset sales has been a tax-efficient way to provide returns to shareholders,” says Stockert, a former senior vice president and chief financial officer at Duke-Weeks Realty Corp. before joining Post in January 2001.

He says, “We intend to continue selectively selling properties in order to strengthen the portfolio and to take advantage of what we believe is currently favorable pricing for apartment assets.”

Post’s third-quarter funds from operations totaled $27.2 million versus $37.5 million in the same 2000 period, as GlobeSt.com reported Nov. 6. On a diluted per-share basis, FFO was 65 cents, compared to 87 cents previously. Year-to-date, FFO per share was $2.02 against $2.66 in the prior year.