A Ranch House May Be Better Than a Retailer
If you want to bet on real estate, a ranch house may be better than retail stocks.
Shares of several large retailers shot up late last week on word that Vornado Realty Trust Inc., a real-estate investment trust, had purchased a 4.3% stake in Sears, Roebuck & Co. Shares of Sears soared almost 24%, while other retailers with large real-estate holdings, such as Dillard's Inc., ShopKo Stores Inc. and Toys "R" Us Inc., also climbed. They all remain between 2% and 20% higher over the past three days of trading.
The view from retail investors: The real estate many of these companies are sitting on hasn't been fully appreciated by the market. If investors such as Vornado can get these companies to unlock value in their own real-estate holdings, the stocks could soar, these investors argue.
At first blush, the excitement makes some sense. Many of these stocks have been lackluster performers for years, even as the real-estate market has been booming. That suggests that the shares might not reflect the inherent value of the land, stores and leases they hold. Among retailing investors, the buzz picked up over the summer, highlighted by a July report about the hidden value of some retail real-estate holdings by Deutsche Bank analyst Louis Taylor, titled "Gold in Them Thar Retailers." A big sale of the 257-store Mervyn's chain in the summer, which fetched a rich price for Target Corp., also whetted the appetites of investors.
Bulls on Sears even suggested that the stock could top $80 a share if the company moves to sell its real estate. Yesterday, Sears shares were at $44.63, up $1.50 in 4 p.m. composite trading on the New York Stock Exchange, giving it a market value of about $9 billion. Its price-to-earnings ratio is 29, above the trailing P/E of 20 for its peers, although Sears's earnings are expected to climb to $1.95 a share next year from $1.56 this year, according to Deutsche Bank.
But much of the real estate held by retailers is limited in its potential use. A store in a mall could be used for another retailing venture, or perhaps a movie theater. But such stores can't easily be converted into condos, retirement housing and nursing homes. And the process of closing a store and putting it up for sale can cripple its value, even to real-estate developers, as customer traffic dries up and costs, such as taxes, security and lighting, continue to be paid.
At the same time, Mervyn's stores were in more-valuable off-the-mall locations in wealthier areas than others that might be for sale by retailers, some analysts point out.
"Everybody in the business has valuable real estate, but retailing is overstored," making it unlikely that the holdings of Sears and others will bring much in any large-scale sales, says Bernard Sosnick, an analyst at Oppenheimer & Co. with a "neutral" rating on Sears. "I respect what Vornado might see, but I've seen this movie before, and it doesn't end well."
Other real-estate veterans have looked at the retail business in the past, in part because of valuable leases and land owned by the companies. But the results have been mixed. Vornado has done well buying the Alexander's Inc. department store and turning a prime New York location into an office, retail and residential property. Hedge-fund honcho Edward Lampert has seen the value of his investment in Kmart Holding Corp. soar, in part because of piecemeal sales of stores by the retail giant. Mr. Lampert is the largest shareholder of both Kmart and Sears, leading to speculation that he and Vornado could team up to help engineer a sale of some Sears stores. A spokesman for Mr. Lampert declined to comment.
But a foray by Robert Campeau, a Canadian real-estate mogul, into the retail business failed when he took over Federated Department Stores Inc. in 1988 and the retail giant filed for bankruptcy protection just two years later. Some investors also lost big bucks betting on shares of Woolworth Corp. in the late 1990s figuring key real-estate holdings presented value in the stock. By 1997, Woolworth closed all of its U.S. stores.
Sears of Hoffman Estates, Ill., could be an especially challenging proposition as a real-estate play. The company operated 871 stores as of the beginning of the year, all but six in mall locations. That would limit the types of buyers that might be interested. For example, Home Depot Inc., which has been paying top dollar for retail sites, typically prefers larger sites away from malls.
At the same time, only 516 of Sears's stores are owned by the company, with 355 leased, according to a Sears spokesman. The sale of stores leased by the company would be harder to pull off at a high price because landlords would be expected to ask for sweet terms to let Sears off its lease as part of any deal. Sears does operate about 1,100 specialty stores that aren't in malls, such as Sears Hardware stores, but most of these are independently owned or leased. In late September, Sears purchased 50 off-mall stores from Kmart and assumed six leases from Wal-Mart Stores Inc.
A Sears spokesman wouldn't comment on the Vornado purchase other than to say, "We are pleased that Vornado sees value in our stock." But the company has given no indication that it is interested in selling stores or otherwise tapping into any rising value of its real estate. In fact, the company recently paid a high price for certain Kmart stores and is converting them to Sears stores.
Investors in Dillard's, ShopKo and others also might be disappointed, even if the chains decide to sell some stores. That is because any push to sell stores could flood the market, sending prices lower. Some analysts say Toys "R" Us could sell stores, as it faces pressure from competitors such as Wal-Mart, adding to supply on the market. Dillard's is seen as a potential takeover target because its operating margins might be improved by a competitor, but its real estate is unlikely to drive such a deal, one hedge-fund manager argues.
Some on Wall Street are scratching their heads about what New York-based Vornado is up to with its Sears investment.
While there is some speculation that the company could try to use its stake in Sears to push the company to sell to Vornado some choice real-estate holdings, others doubt any sort of preferred deal would stand up legally. At the same time, Vornado would have a hard time converting many of Sears's sites to other uses.
Instead, some traders speculate that Vornado's move into Sears was a low-risk bet that management will be able to turn around the retailer.
Because Sears's real-estate holdings are valued by many at about $28 a share, and Vornado's investment, made in recent months, was at an average price of $39.82 a share, some say the real-estate investment trust saw the real estate as a safety net as it waits for Sears management to stage a turnaround.
A Vornado spokeswoman declined to comment.
梅龙对梅铎采取行动
将军！在两位媒体巨头一年来的角逐中，鲁珀特?梅铎（Rupert Murdoch, 又译：鲁珀特?默多克）可能暂时挡住了约翰?梅龙(John Malone)更猛烈的进攻，但看上去梅铎最终恐怕要弃子认输，不得不买下Liberty Media Corp.一定比例的资产，包括这家媒体投资公司在新闻集团(News Corp.)的持股。
这对梅龙领导的Liberty来说可是一个好消息，该公司股票这些年来长期低迷不振。取决于交易条款，这样的收购可能对新闻集团也是个好消息。这笔交易将意味著两位精明的长者之间长达15年的关系进入了高潮。他们曾联手创办过一些合资企业，但有时又是针锋相对的竞争对手。
Liberty上周宣布获得了将其在新闻集团中具有投票权的持股比增加将近一倍的权力，达到17%，比梅铎家族持有的具有投票权的股票比例30%只低了13个百分点。作为回应，新闻集团董事会采用了股权摊薄反收购措施，以阻止Liberty继续提高持股比例。
截至周二纽约股市收盘，新闻集团具有投票权的B类股票如以when-issued的计算方法，股价下跌60美分，至每股17.60美元。新闻集团市值约为500亿美元。
华尔街人士纷纷猜测，Liberty董事长梅龙正在全力迫使新闻集团董事长梅铎买下一部分Liberty资产。许多投资者相信，梅龙的长期策略是分拆Liberty业务，集中精力发展他新创立的国际有线公司。为了顺利分拆，梅龙会剥离Liberty的有线电视节目资产，如在Discovery Communications的50%股权，还有在新闻集团的持股。然后把这部分资产分拆或出售给新闻集团。Liberty眼下与两家有线运营商Cox Communications Inc.和Advance/Newhouse一起共同拥有Discovery。
截至目前，梅铎没有表现出任何与Liberty达成类似协议的兴趣。但投资者们认为，他可能会慢慢被迫改变想法。Liberty大量买入新闻集团的股权表明梅铎对新闻集团的控制可能会受到一次主动出击的威胁，而得到Liberty这部分资产的控制权会巩固梅铎家族对新闻集团的控制权。此外，没人怀疑新闻集团会在价格合适的时候染指Discovery。
T. Rowe Price的分析师埃伦伯根(Henry Ellenbogen)说，Liberty把自己摆在了一个“很有利的位置来和新闻集团谈判”。根据FactSet Research Systems Inc.的数据，截至6月30日，T. Rowe Price持有1,690万股Liberty股票，和大约80万股由新闻集团持有多数股权的美国子公司──福克斯娱乐集团(Fox Entertainment Group Inc.)的股票。埃伦伯根说，Liberty增持了新闻集团的股票，但并不一定要迫使梅铎收购Liberty，而是“抛出一个诱饵，（促使他）认真考虑一下（收购）这些资产”。
Mark Asset Management的总裁马克(Morris Mark)说，“如果你是新闻集团的高层管理人员，我觉得你可能会想买下这些股票。”FactSet数据显示，截至6月30日，Mark Asset Management持有347万股Liberty股票和337,128份新闻集团的美国存托凭证。
分析师们普遍认为，Liberty的当前股价并未完全体现公司资产的价值。比如说，美邦(Smith Barney)分析师古普塔(Niraj Gupta)就估算，Liberty在新闻集团的持股就价值87亿美元（相当于Liberty每股3.02美元），差不多是Liberty公司270亿美元市值的三分之一。古普塔说：“将这部分资产剥离的做法，会迫使市场按合理价格重估公司资产的价值。”
根据古普塔对各部分业务的估算和加总，他预计Liberty股价会在12个月内升至13.60美元。虽然周一下跌了12美分，收于9.51美元，Liberty的股价也已经在这几周上涨了大约10%。古普塔将Liberty的股票评级定为买进，他持有该股。
Liberty对新闻集团的投资是通过多年逐渐买入无投票权的股票而积累起来的。梅铎和梅龙一起作生意已经差不多15年了，其中包括合资创办一家地区性体育有线电视网。有好几次，Liberty都把自己在合资企业中的持股出售给新闻集团，换取新闻集团的股票，最终将自己对新闻集团的持股比例增加到18%，全部都是不具投票权的股份。但后来，Liberty卖掉了一些不具投票权的股票，买入了新闻集团9%具有投票权的股票，这是今年年初披露的。
哪怕Liberty更野心勃勃的策略不能成功，它也注定会从持有的新闻集团的有投票权和无投票权的股票中获利。几个月内，新闻集团将公司注册地从澳大利亚迁往特拉华州的做法有望推动其股价上扬，注册地登记已经从本周开始生效。新闻集团有望被纳入标准普尔500指数，最终成为部分投资者必买的股票，比如那些追踪股指的共同基金。
Liberty甚至将上周宣布的协议条款订得让自己能够从成份股的调整中获利。根据协议条款，Liberty有权在明年4月从美林(Merrill Lynch & Co.)手中收购新闻集团大约8%的有投票权的股票，很有可能用手中的无投票权的新闻集团股票作为交换。因为无投票权的股票也会被纳为成份股，所以成份股调整后无投票权的股票价格也会上涨。这就意味著，在Liberty从美林手中收购股票的交易完成之前，就已经降低了收购成本。
梅龙需要一次漂亮的本垒打。1999年出售大型有线电视公司Tele-Communications Inc.后，他失去了相应的影响力和规模。公司股票慢慢地失去了投资者的欢心，他们对Liberty复杂的公司结构颇为不满。尽管Liberty采取了不少措施来简化公司结构，增加它在投资者心目中的吸引力，该股依然表现低迷。因此，人们越来越怀疑梅龙正在四处找退路。
今年年初，梅龙承认曾考虑将Liberty一拆为三：国际业务、有线电视节目业务和互动业务，但最终只分拆了国际业务。虽然此举简化了公司结构，但股价丝毫不见起色。
“我们觉得，再过一段时间，梅龙会想办法用一种税收方面有利且有序的方法，将整个公司清盘出售，”埃伦伯根说。
