Duke Realty Corp.
) has priced a public offering of 36 million common shares at
$14.25 per share. The move comes as part of its effort to
generate cash to repay its debt as well as for general corporate
purposes. Moreover, the underwriters have been granted a 30-day
option to purchase up to 5.4 million additional shares.
DUKE REALTY CP (DRE): Free Stock Analysis
MORGAN STANLEY (MS): Free Stock Analysis
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Particularly, Duke Realty plans to use the proceeds from this
public offering to pay down debt, including all or part of its
outstanding borrowings under its existing revolving credit
facility that had unpaid balance of $285 million as of December
Further, the company plans to use the fund raised from this
offering for redeeming outstanding shares of its Series O
Preferred Shares that are redeemable as of February 22, 2013, as
well for other general corporate purposes.
The joint book running managers for this offering were Morgan
Stanley & Co. LLC of
) and UBS Securities LLC, a unit of
). The offering is scheduled to close on January 15, 2013.
For Duke Realty, paying back debt is encouraging as it would
lessen its interest expenses, though the resulting share dilution
impact cannot be ignored.
Duke Realty is expected to release its fourth-quarter 2012
results on January 31, 2013. The Zacks Consensus Estimate for the
company's fourth quarter FFO is currently pegged at 26 cents per
The Earnings ESP (Expected Surprise Prediction), the percentage
difference between the Most Accurate Estimate and the Zacks
Consensus Estimate, for Duke Realty is nil. This, combined with
its Zacks Rank #3 (Hold), reflects that the company is expected
to report in line with the Zacks Consensus Estimate in the fourth
quarter. Additionally, we have a long-term Neutral recommendation
on the stock.