Whitestone REIT (WSR, Financials) declined a $15 per share acquisition proposal from MCB Real Estate, sending its stock down 3% on Wednesday.
Whitestone's report indicates the board turned down the offer unanimously, saying it undervalues the U.S. retail center operator and does not justify starting discussions.
Rising its original $14 per share proposal in June, MCB Real Estate is looking to purchase Whitestone for an expected $1.45 billion, including debt. As of June 3, beyond the public disclosure of MCB's interest, the all-cash $15 per share offer offers a 14.5% premium over Whitestone's share price. Currently, Whitestone's third-largest stakeholder is MCB.
In its statement, Whitestone's board said MCB's most recent bid is "opportunistically timed," meaning it seeks to profit from the company's revival under fresh leadership. Taking over in January 2022, Whitestone's management has concentrated on increasing shareholder returns by claiming better performance than rivals in the sector.
MCB's Managing Partner, P. David Bramble responded that Whitestone's choice was "wholly insufficient" for shareholders. Bramble noted that shareholders should be more open about the board's reasoning for rejecting the offer.
Bramble further pointed out that Whitestone's stock performance is mostly driven by speculation regarding acquisition bids rather than management-led development.
Whitestone also posted its third-quarter financial data on Wednesday and answered any strategic review concerns on Thursday's call.
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