Wintergreen Advisers Increased its Position in Consolidated-Tomoka (NYSEMKT:CTO)


Wintergreen Advisers, LLC, boosted its already significant holdings in Consolidated-Tomoka Land. Co. (NYSEMKT:CTO) a real estate firm based in Florida.

According to an SEC filing dated Nov. 14th, the shares were purchased for investment purposes, and New Jersey-based Wintergreen now beneficially owns about 1,553,075 shares, or 27.06%, of Consolidated-Tomoka’s equity. Based on the filing Wintergreen started accumulating their position in 2006. 

Market Activity

The acquisition came just as Consolidated-Tomoka (NYSEMKT:CTO) announced that it was in talks with Cocina 214 and LandShark Bar & Grill for leases that will lead to the construction of two restaurants on a six-acre beach parcel in Florida held by the company’s 50%-owned real estate venture.

According to a November 14th press release, “the development will bring a much needed oceanfront dining experience to the Daytona Beach area, offering residents and visitors alike with two restaurant brands that have regional and national followings.”

But Consolidated-Tomoka also nixed a purchase and sale agreement with an affiliate of Land Venture Partners, LLC covering about 500,000 acres of subsurface interests in Florida. The deal, originally signed in April, could have fetched the company about $24 million.

Consolidated-Tomoka (NYSEMKT:CTO) and the affiliate failed to reach a resolution on title acceptability issues, and despite discussing a modified transaction structure, the parties mutually agreed to terminate the existing agreement, according to a November 10th. statement.

In October, Consolidated-Tomoka reported net income of $1.44 per share for the third quarter of 2016, representing an increase of $1.08 per share on a yearly basis. Revenues, meanwhile, came in at $12.2 million, up 47.2% year on year.

Director Nomination

Wintergreen, meanwhile, floated a proposal covering four director nominees for inclusion in Consolidated-Tomoka’s 2017 proxy statement. They include Wintergreen COO Liz Cohernour, consultant and former Wintergreen employee Evan Ho, consultant Edward Pollock and Wintergreen CEO David Winters.

In April, Wintergreen managed to sway Consolidated-Tomoka shareholders to vote in its favor at the annual meeting, effectively preventing the real estate firm- from issuing new shares of stock.

Wintergreen argued then that such a plan, if fully exercised, could fully dilute existing Consolidated-Tomoka shareholders to the tune of more than 23%. It also deemed this proposal as destructive to the interests of shareholders.

During the meeting, over 69% of the votes cast backed a plan to hire an independent adviser to study ways to maximize shareholder value via the sale of Consolidated-Tomoka (NYSEMKT:CTO) or through the liquidation of its assets. And while it retained Deutsche Bank to review strategic alternatives, Wintergreen believes Consolidated-Tomoka is not that prepared regarding the results of the review.

Wintergreen’s nominees will seek to complete this mandate in a transparent and shareholder-friendly manner.

The investment firm plans to carefully review the performance of Consolidated-Tomoka, including, but not limited to, its share price, business assets, operations, financial conditions, capital structure, management’s performance and prospects. It has a good faith intention to maintain an ownership interest in the company.