Back in December I predicted that Campus Crest Communities (CCG) would likely become the takeover target for a private buyer, I wrote:

My shark instincts tell me to avoid this REIT and I would be surprised if this REIT is around a year from now – a private buyer seems the most likely solution.

When there’s blood in the water that’s a good sign that the kiddies playing slot machines should scramble, because the high-rolling sharks are entering the room. That’s exactly what  did! (I exited early. I no longer own shares in CCG). In a recent SNL Financial article, Jake Mooney said that

…dueling press releases from company management and an activist investor on the future of Campus Crest breathed new life into the student-housing REIT’s share price.

Yesterday shares in the troubled campus housing REIT rose 11.7% to a recent price of $7.85.

I’m Leaving That Up to the High Rollers

I exited from the high-rollers table months ago after I got concerned with the potential for Campus Crest to slice its dividend. It was clear that the previous management team was not managing risk, instead former CEO, Ted Rollins, had put the company in a precarious position, taking on too much debt and investing north of the border (in Canada). The REIT was no longer a safe bet and the poorly managed company eventually had to “reshuffle the deck”.

The new cards for Campus Crest consists of (i) a dividend cut, resetting the common dividend to an annualized rate of $0.36 per share from $.90 per share, (ii) selling assets and exploring other liquidation options, and (iii) bringing in new management.

On February 16th Campus Crest said that it was exploring alternatives, partly as a result of several unsolicited inquiries by highly qualified institutions”. That same day, Clinton Group, Inc. said that it had partnered with a private owner (Campus Evolution Villages, LLC) in a bid to take over the reins of the REIT.

Campus Crest management was aware of the investor’s proposal when it made its strategic alternatives announcement: Clinton Group informed the company’s board of the plan the previous week, the firm’s senior portfolio manager, Joseph De Perio, said in a letter to the company. Jake Mooney at SNL explains:

The sharp share-price rise, then, came as investors mulled two competing plans to right the company’s ship. Standing behind company management would mean betting on a sale and on the operational acumen of Aaron Halfacre, who joined the company in August 2014 as an executive vice president and “change agent,” and has since been promoted twice — most recently, on Feb. 16, to the position of president.

Continue reading this article here.