CB Richard Ellis shares jump amid offerings (AP)
Wed, 10 Jun 2009 20:33:17 Etc/GM
The Los Angeles-based company said it sold 13.4 million Class A common shares to investment firm Paulson & Co. Inc., for gross proceeds of about $100 million.
In addition, CB Richard Ellis said it plans to sell another $50 million in shares from time to time through J.P. Morgan Securities Inc., which will act as the sales agent or principle.
The company also said that it would look to sell $400 million in senior subordinated notes in a private placement. The notes, due in 2017, would be issued by the company's wholly owned subsidiary, CB Richard Ellis Services Inc.
Proceeds from all three sales would go toward general corporate purposes, which could include the repayment or repurchase of outstanding debt, the company said.
Shares gained $1.11, or 13.64 percent, to close at $9.25 for the day.
Morgan Stanley analyst Vance Edelson said the new capital-raising efforts should help the company push off payment of some its near-term debt maturing this year and next.
Investors also reacted strongly to the company's stock sale to Paulson & Co., run by fund manager John Paulson, who made billions betting against sub-prime mortgages and related securities.
"They were able to place sales with a well-known investor," Edelson said of CB Richard Ellis. "So that's seen as a vote of confidence."
Still, he cautioned against painting an overly rosy picture of the company.
The commercial real estate industry still face challenges in the months ahead, he said, and financing remains difficult.
CB Richard Ellis announced that it expects earnings per share, excluding one-time items, to range between break-even and 7 cents a share. Analysts, on average, forecast 7 cents a share, according to a poll by Thomson Reuters.
source: http://biz.yahoo.com/ap/090610/us_cb_richard_ellis_mover.html?.v=2