Last week it was announced that STORE Capital Corp. (STOR) is going private. GIC and Oak Street offered to buy STOR for about $14 billion. As part of the proposed buyout, shareholders of STOR will receive $32.25 per share. As of now, STOR is in a “go shop” period in which it can consider alternative offers until October 15, 2022. The deal is expected to close in the first quarter of 2023. STOR plans to pay the next scheduled dividend but will suspend future dividend payments.
My Position
I find this news to be unfortunate. Although my position in STOR is small at just 13.596 shares, I have been slowly building up my position. This was a position that I planned to hold for the long term. I held this position in my Roth IRA and looked forward to the tax-free income in my retirement. My cost basis on my position is $29.30 so I will make a nice little profit from the buyout.
My Plan
As of the time of this writing, I plan to hold my position through the ex-dividend date at the end of September. I may hold all the way through the “go shop” period in mid-October. After that I will look for a chance to get out of my position around the $32.25 buyout price. Worst case scenario is that I will have to hold my position until the buyout closes.
Replacements
As far as what I buy with the proceeds, I have not put a whole lot of thought into it yet. I am leaning to building up one or more of my current positions in my Roth IRA. I have a lot of good options to choose from. One option would be to stick with REITs like MPW, DLR, AMT, STAG or IIPR. Another option is to put it into income ETFs like DIVO, JEPI or JEPQ. I could also put the proceeds into my favorite ETF SCHD. I feel I have a lot of quality options to choose from when replacing STOR.
While I am disappointed that I will no longer be able to invest in STOR, it is not the end of the world. The stock market is full of quality businesses to invest in. I am not in a rush to get rid of my shares. Who knows, maybe another offer comes in which will pay more. I figure I will let this play out over the next month or so. During this time I will do some more research on how to invest the proceeds I will receive from the buyout.
*Disclaimer – I am not a financial professional. The information shared here should not be considered financial advice. I am just a factory worker sharing my experience as I strive to achieve financial freedom. Before investing or making any financial decision do your own research and due diligence or consider seeking the advice of a financial and/or tax professional.
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If you don’t mind taking risk on a small company I’d recommend researching CTO Growth Realty. The trade off for the risk is higher growth (dividend & equity). CTO’s last dividend increase came in at 12%.
At a quick glance, CTO looks intriguing. I will have to do a deeper dive into it. Thanks for the tip.
Hmm, STORE was on my shopping list. One good one down.
It is unfortunate. I liked the long term potential of STOR but, there are plenty of other quality investments to be had.