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MCB Real Estate's $14 per share offer for Whitestone REIT (New York Stock Exchange:WSR) could start a bidding process for the mall REIT, according to an investor.
Whitestone REIT (WSR) rejected MCR Real Estate's $14 offer about a month ago, saying that the price does not represent a “fair valuation”. MCB has a 9.4% stake in WSR.
Erez Asset Management, which lost a proxy contest to add directors in May, believes Whitestone REIT (WSR) will likely be sold after the MCB offer.
“It is significant that the proxy contest achieved our goal of drawing attention to the company, and within weeks of the shareholder vote, Whitestone received a takeover proposal at $14 per share,” Bruce Schanzer, president of Erez Asset Management, wrote in a letter to investors last week, reviewed by Seeking Alpha. “While the company has rejected the offer, we believe this is only the early stages of a potential change of control.”
While Whitestone REIT (WSR) may argue that the $14 price tag doesn’t represent a “fair valuation,” WSR stock had risen more than 40% as of June 11 (the day WSR’s rejection was revealed) since Bloomberg reported in late October that Fortress Investment Group approached the retail owner about an acquisition. The 40% increase compares to the average price performance of similar malls over the same period, which rose about 12%.
