Rouse Co. said yesterday that it wants the flexibility to raise $2 billion through the sale of securities to finance future acquisitions and pay off debt, according to a document filed with federal regulators.
The aggressive Columbia-based real estate investment trust (REIT) filed a "shelf registration" statement with the Securities and Exchange Commission.
"It is to give the company plenty of room" to finance its growth, said David L. Tripp, Rouse's director of investor relations. "It doesn't necessarily mean that we have any intention of going out to raise $2 billion at any point in time. But it [the registration] would give us the capacity to do that at some point down the road."
The shelf registration would allow Rouse to raise money by selling debt securities and common and preferred stock over the next two years. This type of registration enables a company to act quickly by taking securities "off the shelf" when it needs money.
Rouse has agreed to acquire seven shopping centers from Toronto developer TrizecHahn Corp., which will cost $1.1 billion. Towson Town Center is one of the malls in the transaction.
Tripp said about half of the money for the shopping centers will come from mortgages on the properties, and another $500 million could be raised in the public debt or equity markets sometime in the summer.
The company expects to buy three or four of the shopping centers in the summer, and it plans to purchase the remaining centers before the year is out, Tripp said.
David Sick, a REIT analyst at Baltimore-based Legg Mason Wood Walker Inc., said Rouse's shelf registration is a good move.
"Rouse is going to need some capital later this year," he said.
"The question is how dilutive it will be" to shareholders.
Tripp said the company is aggressively looking for more acquisitions, especially as the industry consolidates.
Rouse is already one of the country's largest publicly held real estate concerns with 54 shopping centers across the country.
"To grow the business longer term you pretty much have to look at acquisitions," Tripp said.
Pub Date: 5/02/98