MCB Real Estate, a Baltimore-headquartered commercial real estate developer and investment management firm, is renewing its’ attempts to acquire Houston-based Whitestone REIT (NYSE: WSR) by offering to purchase all the outstanding Whitestone shares for $15.20 per share in cash.
Whitestone is a real estate investment trust that acquires, owns, operates, and develops open-air, retail centers located in four Texas markets (Austin, Dallas-Fort Worth, Houston and San Antonio) and in Phoenix.
In an open letter to Whitestone shareholders, MCB Managing Partner P. David Bramble pointed out that his company owns 9.2% of Whitestone’s common shares and was seeking “at a minimum” to orchestrate votes against the entire Whitestone board at the next annual shareholders meeting.
Bramble accused Whitestone of underperforming financially in comparison to its rivals, noting how its implied cap rate of 8.9% “reflects a significant discount to the peer average of 7.1%.” He also complained that Whitestone recorded negative total shareholder returns of approximately 6.6% since MCB’s $15 per share offer from last October was rejected by the board of directors.
“In summary, the performance of Whitestone’s stock demonstrates that the company’s small capitalization and trading float, bloated G&A spending, limited growth prospects and weaker overall asset quality relative to peers – and the market’s lack of confidence in the company’s management and standalone prospects – severely limit the company’s ability to close its valuation gap,” Bramble stated. “A sale of the company is the only way to maximize value for Whitestone’s shareholders.”
Whitestone did not immediately issue a public comment on the offer.
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