MCB Calls on Whitestone to Maximize Shareholder Value
Rhea-AI Summary
MCB Real Estate, managing approximately $3 billion in assets, has issued a statement regarding its $15.00 per share cash proposal to acquire Whitestone REIT (NYSE: WSR). The offer represents a 14.5% premium to Whitestone's share price prior to MCB's initial June 2024 proposal and a 61.8% premium to the price before the rumored Fortress proposal in October 2023. The Whitestone Board has rejected MCB's improved proposal and refused to engage in meaningful discussions. MCB highlights that Whitestone delivered only 0.1% total shareholder returns under current management before takeover interest emerged, and questions the board's refusal to grant due diligence or explore strategic alternatives.
Positive
- MCB's $15.00 per share cash offer represents a 14.5% premium to pre-proposal price
- 61.8% premium to unaffected share price before Fortress proposal
- MCB holds significant position with 4,690,000 shares
Negative
- Board's rejection of acquisition proposal without due diligence
- Only 0.1% total shareholder returns under current management before takeover interest
- High cost of capital and borrowing issues noted
- Apparent inability to raise new equity
News Market Reaction
On the day this news was published, WSR declined 1.92%, reflecting a mild negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
The Whitestone Board Has Summarily Rejected and Refused to Engage Regarding MCB's Improved
MCB Urges the Whitestone Board and Management Team to Cease their Entrenchment Tactics
and Answer Shareholders' Questions
MCB Calls on Whitestone Shareholders to Make their Voices Heard;
Visit www.MaximizingWhitestoneValue.com for More Information
MCB stands ready to deliver immediate and certain value to Whitestone shareholders. Our proposal is compelling by all reasonable metrics, reflecting a
In its rejection, Whitestone has conveniently chosen a time period of total shareholder return that includes multiple acquisition rumors and proposals, as well as MCB acquiring 4,690,000 shares on the open market. In the time between January 18, 2022, when current Whitestone management took over, and October 25, 2023, the day prior to the rumored Fortress proposal, Whitestone delivered total shareholder returns of
We have heard from other shareholders that they are supportive of a potential transaction and share our frustration with the Whitestone Board. The Board's refusal to grant due diligence, engage in any meaningful discussions, or commence a strategic alternatives process is not consistent with its duties and indicates that the Board is entrenched. Whitestone shareholders deserve answers, and MCB encourages Whitestone to address the following questions on its earnings call this morning, so that shareholders can have all the facts regarding Whitestone's refusal to engage or present a compelling path to maximize shareholder value as a public company.
- What does the Whitestone Board believe the Company's net asset value (NAV) to be?
- Whitestone has implied its NAV and discounted cash flow (DCF) based on its internal forecasts indicate a higher "intrinsic value" than provided by MCB's improved proposal – what are those forecasts?
- Why not share the NAV and DCF forecasts with MCB or other potential counterparties?
- What purchase price would the Board need to see in order to grant due diligence?
- How can Whitestone's Board reasonably credit the management team for the
60% total shareholder returns since the management team was appointed, considering that total shareholder returns during the period prior to takeover interest were almost zero? - Given that MCB's purchases represent a significant portion of WSR's trading volume over the course of 2024, what is Whitestone's plan to maintain its share price if MCB withdraws its offer and liquidates its position?
- Has Whitestone engaged with independent advisors or formed a committee of the board to evaluate MCB's proposal or explore strategic alternatives to maximize value? If not, why not?
- Is Whitestone's Board open to running a formal process to evaluate strategic alternatives?
- How can the Board justify its refusal to engage with qualified buyers, such as Fortress and MCB?
- Does Whitestone recognize its continued underperformance versus its peers, and how does management intend to address Whitestone's high cost of capital, high cost of borrowing and apparent inability to raise new equity?
- Will the Whitestone Board and management team spend shareholders' capital defending against a proxy contest again this year? How can that be justified and why is that preferable to engaging with well-capitalized potential acquirers?
Whitestone Third Quarter 2024 Conference Call Details
MCB urges Whitestone shareholders to join Whitestone's Third Quarter 2024 earnings conference call to listen to the Whitestone management team's responses to these and other questions. P. David Bramble, Managing Partner of MCB, will join the call and attempt to ask a question, but based on Whitestone's refusal to engage to date, MCB expects to be rebuffed, again, and is therefore calling on others in the investment community to demand the answers shareholders deserve.
Dial-in number for domestic participants: 1-877-407-0784
Dial-in number for international participants: 1-201-689-8560
Passcode: 13742564
A live webcast of Whitestone's conference call can be accessed at https://ir.whitestonereit.com/corporate-profile/
Additional Materials
Additional materials regarding the proposed transaction, including a letter sent to Whitestone's Board on October 9, 2024 detailing MCB's enhanced proposal, are available at www.MaximizingWhitestoneValue.com.
Advisors
MCB has engaged Vinson & Elkins LLP as lead counsel in connection with the transaction. Wells Fargo is serving as financial advisor to MCB.
About MCB Real Estate
Founded in 2007, MCB Real Estate is a community-centric, privately held institutional investment management firm headquartered in
Media Contacts
Andrew Siegel / Lucas Pers / Lyle Weston
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449
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SOURCE MCB Real Estate
FAQ
What is MCB's cash offer per share for Whitestone REIT (WSR)?
What premium does MCB's offer represent for Whitestone REIT (WSR) shareholders?
How many shares of Whitestone REIT (WSR) does MCB currently own?
What was Whitestone REIT's (WSR) shareholder return under current management before takeover interest?
