Duke hopes stock offering raises $479M-WEB ONLY

Duke Realty Corp. plans to sell 65.4 million common shares in a public offering in order to repay loans under its unsecured line of credit, the Indianapolis-based company announced yesterday afternoon.

Duke today priced the offering at $7.65 per share, and said it hopes to raise $479.8 million in net proceeds.

The company will reduce its quarterly dividend to account for the increased number of shares outstanding. The offering would increase Duke’s outstanding shares by about 43 percent.

Duke made the announcement after markets closed yesterday. Its stock closed at $8.44 per share, down from more than $26 just seven months ago.

Duke plans to reduce dividend payments by 32 percent, to 17 cents a share, in the second, third and fourth quarters. In January, the company cut its dividend nearly in half, to 25 cents a share, for the first quarter.

The Indianapolis-based real estate investment trust predicted first-quarter funds from operations, a key measure of REIT profitability, of 49 cents to 51 cents a share, in line with analyst estimates. Duke’s FFO was 57 cents per share in the first quarter a year ago.

The company also reaffirmed its prediction of 2009 FFO of $1.85 to $2.15 per share.

As part of the stock offering, the underwriters will have a 30-day option to buy up to an additional 9.6 million shares. Merrill Lynch & Co., J.P. Morgan Securities Inc. and Morgan Stanley & Co. are acting as joint book-running managers for the offering.

Duke is slated to report its full first-quarter results on April 30.

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