(By Balaseshan) Geo Group Inc. (NYSE: GEO), a provider of correctional, detention, and community reentry services to government agencies, said it has received a favorable private letter ruling from the Internal Revenue Service for conversion to a real estate investment trust (REIT).
GEO also has received an opinion from Skadden, Arps, Slate, Meagher & Flom, LLP, which advised GEO on its REIT conversion that GEO qualifies as a REIT.
Based on the ruling and the Skadden REIT opinion, GEO's board of directors has authorized GEO to elect REIT status effective January 1, 2013.
On January 17, GEO declared first ever quarterly cash dividend as a REIT of $0.50 per common share, payable on March 1 to shareholders of record as of the close of business on February 15.
The dividend was based on GEO's new outstanding share count of about 71.3 million, which includes the issuance of about 9.7 million shares in connection with GEO's $350 million special dividend which was paid on December 31, 2012.
On January 2, the company said it has completed all the necessary restructuring steps on December 31, 2012, including the divestiture of its health care assets, enabling GEO to operate in compliance with the REIT rules of the Internal Revenue Code beginning January 1, 2013.
GEO is trading up 5.11% at $32.29 on Friday. The stock has been trading between $16.56 and $32.89 for the past 52 weeks.