Q: As a followup to my question yesterday about Leon's how seriously should we take this interest in setting up REIT? You have noted in the past that one of the underlying values of LNF was their real estate so is this an idea that management is floating or does it look like it will come to fruition? How should a shareholder react to this news - buy more, sell or hold until it plays out?
Appreciate your insight.
Paul F.
Appreciate your insight.
Paul F.
5i Research Answer:
It has been discussed before, but LNF has never press released 'its intention to create' a REIT. While there is no guarantee it will be able to do so (taxes and lawyers and re-organization is involved) we certainly would consider it a serious proposal. With the stock now up 38% some of the impact is now in the stock. Its move last week was its biggest ever. It is still cheap though. We would be OK buying, but it is still small cap stock with economic exposure. It is not risk-free and we would weight accordingly.