Robbins LLP: Acquisition of Inland Real Estate Corporation (IRC) by DRA Advisors LLC May Not Be in Shareholders’ Best Interests
Robbins LLP is investigating the proposed acquisition of Inland Real Estate Corporation (NYSE: IRC) by DRA Advisors LLC. On December 15, 2015, the two companies announced the signing of a definitive merger agreement pursuant to which DRA will acquire Inland Real Estate. Under the terms of the agreement, Inland Real Estate shareholders will receive $10.60 in cash for each share of Inland Real Estate common stock.
Is the Proposed Acquisition Best for Inland Real Estate and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at Inland Real Estate is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $10.60 merger consideration represents a premium of only 5.1% based on Inland Real Estate’s one-week average closing price. This premium is significantly below the average one-week premium of nearly 16.5% for comparable transactions within the past five years. Further, the $10.60 merger consideration is significantly below the target price of $12.00 set by an analyst at KeyBanc Capital Markets on September 11, 2014. In the last three years, Inland Real Estate traded as high as $12.05 on May 22, 2013, and most recently traded above the merger consideration – at $10.67 – on May 8, 2015.
On November 5, 2015, Inland Real Estate reported strong earnings results for its third quarter 2015. Net income attributable to common stockholders for the quarter was $8.3 million, an increase of 254% compared to the same period last year. Recurring Funds from Operations per share was $0.25 for the quarter, an increase of 4.2% compared to the same period last year. Additionally, Inland Real Estate has beat consensus analyst estimates for adjusted EPS, adjusted net income, and sales in three out of its past four quarters. In commenting on these results, Inland Real Estate President and Chief Executive Officer Mark Zalatoris remarked, “For the quarter we reported an increase of 4.2% in Recurring FFO per share, as well as another quarter of robust leasing activity in the total portfolio with very strong rent spreads on both new and renewal leases.”
In light of these facts, Robbins LLP is examining Inland Real Estate’s board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Inland Real Estate shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Inland Real Estate shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.