Excerpt from our One Page Annotated Wall Street Journal Summary (get it e-mailed to you every morning by signing up here):
Venture to Buy Heritage Property
Summary: Strip-mall owner Heritage Property (HTG), which has been strongly criticized of late for its generous executive compensation packages amid poor stock performance, will be purchased for about $1.83 billion by an Australian and American joint venture, Centro Watt. Centro Properties is a publicly-traded Australian concern, and Watt Commercial Properties is a Los Angeles-based private company. The buyout price is $36.15/share, just a 3.3% premium over Heritage's closing price on Friday. Centro was able to offer more than many American suitors of Heritage due to the low current cost of capital in Australia.
Comment on related stocks/ETFs: That lower cost of Australian capital is one of the reasons the Australian ETF (NYSEARCA:EWA) is attractive to many investors these days. Roger Nusbaum notes that Australia hasn't had a recession since 1991, and has healthy GDP growth and natural resources to draw upon. Heritage has underperformed its peers since it went public more than four years ago, with a total return to investors of 87.7% since it went public in April 2002, compared with 154.5% for strip-mall companies, the Journal reported.