Chapman Capital sent a letter to
American Community Property Trust
(AMEX:APO) today demanding that the company re-evaluate the activist
hedge fund's $25/share liquidation proposal. The hedge fund, which
specializes in small cap restructurings and turnarounds, has been
fighting for a liquidation since REITs went out of favor causing
substantial discounts to net asset values. Chapman is hoping that it
can talk some sense into the resistant controlling Wilson family and
unlock significant value for shareholders through a liquidation at
roughly a 25% premium.
In a heated letter to ACPT today, Mr.
Chapman commented, "The management team in place is implementing a
long-term strategy that IS NOT WORKING. If you understood, even
slightly, that your job is not to develop real estate but to build
shareholder value in the public markets through real-estate related
development, this would be patently obvious to you. Instead, your
response, like all those that preceded it, confirms every fear I have
about the Wilson family's role in the tragic underperformance of this
asset-rich enterprise. Like TrizecHahn and others in the 'Old Economy',
selling assets to the private market rather than waiting for the public
market to realize the estimated $25/share in intrinsic value is the
only viable option. Thus, on behalf of the public shareholders of ACPT,
I demand that you begin an orderly liquidation of the company
immediately."
Many shareholders have been disappointed with the trust's
performance during the past year and are ready for change.
Unfortunately, the Wilson family holds a controlling stake in the
company and has openly stated that it would not support a liquidation.
Usually this would eliminate any possibility of returns; however,
Chapman Capital has a lot of experience in these situations and may be
able to force change. If successful, the resulting liquidation would
result in around 25% return to shareholders based on today's market
price. This makes APO a stock worth watching!
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