Golf Trust mulling buyout proposal

Charleston-based Golf Trust of America Inc. said Monday that it would remain open-minded about a buyout proposal it has received from a company that processes and maintains electronic medical records.

Global Medserv Inc. of Chicago sent a letter to the Golf Trust officials last week outlining its offer.

The plan includes a 25-cent dividend payment for each outstanding share, for a total of $1.83 million, and an 8 percent stake in the merged company.

Global Medserv is looking to strike a deal within 45 days.

One of the attractions is that Golf Trust's listing on the American Stock Exchange would enable a buyer to become a publicly traded business more easily than it could otherwise, said Stayko D. Staykov, president of Warren & Lewis Investment Corp., which is an owner of Global Medserv.

Shares of Golf Trust have been trading for just under $1 in recent weeks.

As of Monday, the company's 7.3 million shares outstanding were valued at $6.95 million.

Golf Trust stockholders voted to liquidate the once-sizable golf-course portfolio and other assets more than seven years ago and split the proceeds.

But that plan was repealed in late 2007 after several professional investors amassed large stakes in the company, gained control of the board and installed a new top executive

With its last two layouts set to be sold next month, the company has yet to disclose a new strategy to investors.

Global Medserv's chief financial officer, Patrick Custardo, said in a statement that a merger of the two companies would benefit both sides.

He said Global Medserv is "uniquely positioned to capitalize on our industry" while noting that Golf Trust "has no assets and no viable business" but continues to incur annual expenses estimated at about $750,000, such as executive salaries, office rent and financial reporting costs.

The would-be acquirer was formerly known as DGF Medserv Inc.

It said it would assume of all Golf Trusts's assets and liabilities if the deal goes through.

It also would require that Golf Trust's directors resign.

The offer was mailed to the Golf Trust board one week before the annual shareholders meeting, which was held Monday at the Francis Marion Hotel.

The buyout offer from Global Medserv was not discussed.

Michael Pearce, Golf Trust's chairman and chief executive officer, said afterward that it was too early to respond specifically to the merits of the proposal.

"We're open-minded to doing whatever we can to add value to shareholders, sooner rather than later. But it's more important to be right," he said.

Pearce said buyout offers are complicated to evaluate because of financial losses that Golf Trust has piled up over the years.

Those losses are now potentially valuable assets for the company in the event of sale because a qualified buyer could use them offset future taxes.

"That has a complex set of rules," Pearce said. "Whenever we evaluate a potential transaction, that's one of the things that go into the mix."

He said Golf Trust has spent most of the past year resolving "housekeeping legacy issues" such as lawsuits. He would not say specifically when the company will announce a new direction.

"The time is now to grow anew," he said. "We have a lot of things under consideration."

Pearce said the ailing economy has opened up a wealth of investment possibilities.

"The quality of opportunities right now is lot higher than a year ago," he said. "The opportunities we're seeing right now we might not have seen even a year ago."


Source: charleston.net