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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 (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.
Source: Mall Owner Heritage Property Sold to Australian/American Group (HTG)