(adds 1Q forecast, details on dividend cut, updates stock price)
DOW JONES NEWSWIRES
Duke Realty Corp. (DRE) said it plans to sell 64 million common
shares to repay borrowings under its unsecured line of credit and
as a result will reduce its quarterly dividend to account for the
increased number of shares outstanding.
The offering would increase outstanding shares by 43%, sending
shares down 4.2% to $8.09 in after-hours trading.
Duke said it plans to reduce dividend payments by about a third
to 17 cents a share in the second, third and fourth quarters. In
January, the company cut its dividend almost in half to 25 cents a
share for the first quarter.
The Indianapolis-based real estate investment trust also
forecast first-quarter funds from operations, a key measure of REIT
profitability, of 49 cents to 51 cents a share, in line with
analysts' estimate of 51 cents.
Duke said the decrease from last year's FFO of 57 cents is the
result of fewer gains from sales of built-for-sale properties and
lower land and lease termination fees.
Also, Duke backed its January guidance of 2009 FFO of $1.85 to
$2.15.
As of March 31, the company had about $625 million available
under its unsecured line of credit, which is scheduled to mature
next January.
As part of the stock offering, the underwriters will have a
30-day option to purchase up to an additional 9.6 million shares.
Merrill Lynch & Co., J.P. Morgan Securities Inc. and Morgan
Stanley & Co. are acting as joint book-running managers for the
offering.
Duke has laid off workers, cut its dividend, frozen managers'
salaries and closed some operations to preserve liquidity amid the
recession.
In January, the REIT said its fourth-quarter net income fell 63%
while FFO declined 8.4%.
-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975;
Kathy.Shwiff@dowjones.com