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EastGroup Gaining $29M from Common Stock Sale

JACKSON, MS-The locally headquartered public company agrees to sell 800,000 shares of common stock to Citigroup Global Markets Inc., the proceeds from which will go toward acquisitions, developments and mortgage debt obligations.

By Brian K. Miller | Updated on March 29, 2005

JACKSON, MS-EastGroup Properties is selling 800,000 shares of common stock. The buyer is Citigroup Global Markets Inc., which acted as the sole book running manager.The transaction will net the locally headquartered public company about $29.5 million. EastGroup officials say the proceeds will be put toward the acquisition or development of properties and to repay a portion of mortgage debt obligations due in 2005.EastGroup Properties, Inc. has granted the underwriter a thirty-day option to purchase up to 120,000 additional shares to cover over-allotments, if any. EastGroup CFO Keith McKey was not immediately available Tuesday for further comment.EastGroup’s portfolio currently includes 21 million sf with an additional 584,000 sf of properties under development. News of the common stock sale was announced after close of markets on Monday.On Tuesday, analysts at BB&T Capital Markets downgraded the company from “buy” to “hold” based on its valuation. The downgrade sparked a sell-off on Tuesday that is driving the company’s share price down. As of Tuesday afternoon, the company’s share price was off by 2.19% or $0.84 cents to $37.56.

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