Cousins Properties Incorporated
) - a real estate investment trust (REIT) - disclosed a public
offering of 14.0 million shares of its common stock. The move
comes as part of its capital infusion efforts to support an
acquisition and redeem preferred stock. Moreover, the company is
expected to provide the underwriters a 30-day option for
purchasing up to an additional 2.1 million shares.
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Specifically, Cousins Properties plans to finance the acquisition
of 816 Congress Avenue, a Class-A office building in Austin,
Texas, with a major chunk of the proceeds generated from this
offering. The purchase is anticipated to close in mid-April 2013
and the property is currently under contract. Moreover, the
company plans to put to use a part of the proceeds for full
redemption of its outstanding 7.75% Series A cumulative
redeemable preferred stock.
For Cousins Properties, though the stock offering would result in
share dilution, it would enable the company to attain financial
flexibility. Financing for strategic acquisitions and investments
is expected to go a long way in enhancing the company's top-line
growth. Moreover, paying back of debt would reduce its interest
expenses. Notably, as of Dec 31, 2011, Cousins Properties had
cash and cash equivalents of $176.9 million.
A host of companies such as - BofA Merrill Lynch of
Bank of America Corp.
JPMorgan Chase & Co.
) and Wells Fargo Securities of
Wells Fargo & Company
) are serving as joint book-running managers for the offering.
Based in Atlanta, Cousins Properties has a diversified portfolio
of office and retail properties, mainly located in the
high-growth Sun Belt region. This helps it mitigate the operating
risks associated with the economic downturns involved in
operating a single business segment.
Also, the company's capital moves augur well and it is enhancing
its liquidity. At the same time, the company remains focused on
leasing activities and continues to pursue attractive investment
opportunities. We expect all these factors to provide upside
potential to the company going forward.
Cousins Properties currently has a Zacks Rank #2 (Buy).