Curbline Properties Corp. (NYSE:CURB) saw its stock trade lower in after-hours sessions on Tuesday, slipping 2.3% after the company disclosed plans for an underwritten public offering totaling 8 million shares of its common stock.
The offering will be executed on a forward basis under forward sale agreements with Morgan Stanley and BofA Securities, who are acting as the deal’s underwriters. Under the terms agreed, the underwriters hold a 30-day option to purchase up to an extra 1.2 million shares.
According to the company’s statement, the forward sale agreements contemplate physical settlement of the transactions in approximately 18 months from the prospectus date. Curbline noted that it will not receive proceeds from the initial sale of shares by the forward purchasers.
The company said any net proceeds that it may later receive upon settlement will be allocated for general corporate purposes. Those purposes may include property acquisitions, working capital, capital expenditures, or repayment of debt.
Curbline is a self-managed real estate investment trust that focuses on owning and operating convenience shopping centers located at intersections and along major vehicular corridors in higher-income suburban communities.
All shares offered in the transaction will be issued under the company’s existing shelf registration statement filed with the Securities and Exchange Commission. Curbline indicated that a preliminary prospectus supplement and accompanying prospectus related to the offering will be filed with the SEC.
The announcement and offering structure introduce a defined timeline for potential equity issuance, while the absence of initial proceeds from the forward purchasers means the company’s receipt of funds depends on future settlement events. Management’s stated uses for potential proceeds span acquisitions, operational liquidity, investment in property assets, and debt reduction, leaving multiple possible applications for any capital ultimately delivered to the company.