This article was quoting unnamed sources telling that Washington Prime Group and Namdar Realty are supposedly preparing a bid on retail chain Bon-Ton Stores to save Bon-Ton from banktruptcy. The reason to acquire Bon-Ton would be stay in control to probably be able to more smoothly manage the process of closing the Bon-Ton store to avoid immediant vacancies in their malls.
The Reuters article with unnamed sources was followed up by a publication on the 10th of April by Bon-Ton about a letter of intent received from WPG and partners.
According to the February Investor Update WPG is owning 13 Bon-Ton rented stores. These stores are 0,9% of the annualized base rent.
I personally don’t feel comfortable by the idea that a real estate company is taking over a tenant to keep operating their stores to avoid vacancies. As investor I of course love a management trying to keep the occupancy rate high, but I don’t believe that the management of a real estate company can make a retailer perform better. At this moment I don’t have any information available about the capex / working capital which WPG would put into Bon-Ton.
For me reason to already sell this stock after just owning it for a few weeks. I keep this stock on my watchlist and I will evaluate again to take a position when more facts are available.
My yearly estimated dividend income will drop with $200 as a result of selling the WPG shares, but I don’t feel comfortable keeping this position at the moment.
Just short after selling the shares a court ruling could make it less likely Bon-Ton will be taken over by a combination of Namdar Realty, WPG and asset manager DW Partners. Still not enough information available for me to take back my position in WPG.
I bought 48 shares of Enbridge against a price of $31,98 with the proceeds from the 200 WPG shares I sold. At the start month I made my first purchase of Enbridge shares I now own 90 shares Enbridge.
My yearly estimated dividend income is increasing with $100,54 as a result of this purchase.