Erez Asset Management Sees Likely Change of Control Outcome for Whitestone REIT Amid MCB Real Estate's Acquisition Efforts
In its recent 1H 2024 fund update letter, Erez Asset Management, a shareholder of Whitestone REIT (NYSE: WSR), hinted at a potential change of control outcome for the Houston-based REIT. Sources familiar with the letter exclusively shared this information with Investing.com.
MCB Real Estate, based in Baltimore, has been persistent in its attempts to acquire WSR, despite the rejection of its recent $14 per share, all-cash bid. This bid represents a 7% premium over WSR's 52-week high of $13.08 before MCB's offer. However, WSR's management dismissed the bid, stating that it undervalued the company.
Although Erez Asset Management's proxy contest to replace two WSR board directors with their nominees was unsuccessful, the targeted directors eventually stepped down. This move drew attention to the company, leading to a takeover proposal at $14 per share shortly after the shareholder vote.
Amid takeover discussions since October of the previous year and significant buying activity from MCB, which now holds approximately 10% of WSR, the Texas-based REIT has outperformed its peers, posting a 40% increase compared to the sector's 12% gain.
Erez Asset Management's positive stance on MCB's bid suggests that the $14 per share offer may be closer to a fair valuation than WSR's board indicated in their rejection letter. Insider sources suggest that MCB is open to negotiations if WSR's board shows interest in engaging in the process.
While MCB has not explicitly confirmed this, they have expressed a willingness to further discuss with Whitestone's Board to reach a mutually beneficial transaction. MCB emphasized the importance of maximizing value for shareholders through constructive negotiations.
Overall, the ongoing acquisition efforts and potential change of control at Whitestone REIT could have significant implications for investors. It is crucial for shareholders to stay informed about the latest developments and carefully consider their options as the situation unfolds.