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MCB Real Estate’s $14/share offer for Whitestone REIT (NYSE:WSR) may start a bidding process for the shopping center REIT, according to an investor.
Whitestone REIT (WSR) about a month ago rejected MCR Real Estate’s $14 offer, saying that the price doesn’t 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 that Whitestone REIT (WSR) will likely be sold after the MCB bid.
“Significantly, the proxy contest achieved our objective of drawing attention to the company and within weeks of the shareholder vote Whitestone received a takeover proposal at $14/share,” Bruce Schanzer, Chair of Erez Asset Management, wrote last week in a letter to investors viewed by Seeking Alpha. “While the company has rebuffed the offer, we believe this is just the early stages in a likely change of control outcome.”
While Whitestone REIT (WSR) may argue that the $14 price doesn’t represent a “fair valuation,” WSR shares had jumped more than 40% through June 11 (the day the WSR rejection was disclosed) since a Bloomberg report in late October that Fortress Investment Group approached the retail landlord about a takeover. The 40% increase compares with the strip center peer average price performance over the same period, which is up ~12%.
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