MCB Withdraws Proposal to Acquire Whitestone Due to Whitestone Board's Entrenchment and Refusal to Engage
MCB Real Estate has withdrawn its proposal to acquire Whitestone REIT (NYSE: WSR) following the board's refusal to engage in meaningful discussions. MCB had offered $15 per share in an all-cash transaction, representing a 14.5% premium to Whitestone's share price before their initial June 3, 2024 proposal and a 61.8% premium to the price before the Fortress proposal. As Whitestone's largest actively managed shareholder with 9.4% ownership, MCB criticizes the board's entrenchment and lack of strategic review process. The company threatens potential board removal at the next annual meeting if the pattern of delay continues.
MCB Real Estate ha ritirato la sua proposta di acquisizione di Whitestone REIT (NYSE: WSR) dopo che il consiglio di amministrazione ha rifiutato di intraprendere discussioni significative. MCB aveva offerto 15 dollari per azione in un'operazione totalmente in contante, rappresentando un 14,5% di premio rispetto al prezzo delle azioni di Whitestone prima della loro proposta iniziale del 3 giugno 2024 e un 61,8% di premio rispetto al prezzo prima della proposta di Fortress. Essendo il principale azionista gestito attivamente di Whitestone con una proprietà del 9,4%, MCB critica l'inamovibilità del consiglio e la mancanza di un processo di revisione strategica. L'azienda minaccia una possibile rimozione del consiglio nella prossima assemblea annuale se il modello di ritardo continua.
MCB Real Estate ha retirado su propuesta para adquirir Whitestone REIT (NYSE: WSR) tras la negativa de la junta a participar en discusiones significativas. MCB había ofrecido 15 dólares por acción en una transacción completamente en efectivo, lo que representa un 14.5% de prima sobre el precio de las acciones de Whitestone antes de su propuesta inicial del 3 de junio de 2024 y un 61.8% de prima sobre el precio antes de la propuesta de Fortress. Como el mayor accionista gestionado activamente de Whitestone con un 9.4% de propiedad, MCB critica la resistencia de la junta y la falta de un proceso de revisión estratégica. La compañía amenaza con una posible destitución de la junta en la próxima reunión anual si continúa el patrón de demoras.
MCB 부동산은 이사회가 의미 있는 논의에 참여하지 않겠다는 거부를 보인 후 휘트스톤 REIT(NYSE: WSR) 인수 제안을 철회했습니다. MCB는 주당 15달러의 현금 거래를 제안했으며, 이는 2024년 6월 3일 이전 휘트스톤의 주가에 대해 14.5%의 프리미엄에 해당하고 Fortress 제안 이전 가격에 대해 61.8%의 프리미엄을 대표합니다. 9.4%의 지분을 보유한 휘트스톤의 가장 큰 적극적 관리 주주로서 MCB는 이사회의 고착화 및 전략적 검토 과정의 부족을 비판합니다. 회사는 지연 패턴이 계속될 경우 다음 연례 회의에서 이사회를 해임할 가능성을 위협하고 있습니다.
MCB Real Estate a retiré sa proposition d'acquisition de Whitestone REIT (NYSE: WSR) suite au refus du conseil d'administration de s'engager dans des discussions significatives. MCB avait proposé 15 dollars par action dans le cadre d'une transaction entièrement en espèces, représentant une prime de 14,5% par rapport au prix de l'action de Whitestone avant leur proposition initiale du 3 juin 2024 et une prime de 61,8% par rapport au prix avant la proposition de Fortress. En tant que plus grand actionnaire géré activement de Whitestone avec une propriété de 9,4%, MCB critique l'enlisement du conseil d'administration et le manque de processus d'examen stratégique. L'entreprise menace d'une éventuelle révocation du conseil lors de la prochaine assemblée générale si le schéma de retard se poursuit.
MCB Real Estate hat sein Angebot zur Übernahme von Whitestone REIT (NYSE: WSR) zurückgezogen, nachdem der Vorstand sich geweigert hat, an bedeutenden Gesprächen teilzunehmen. MCB hatte 15 Dollar pro Aktie in einer Bartransaktion angeboten, was ein 14,5%iger Aufschlag auf den Kurs von Whitestone vor ihrem ursprünglichen Vorschlag am 3. Juni 2024 und einen 61,8%igen Aufschlag auf den Preis vor dem Angebot von Fortress darstellt. Als größter aktiv verwalteter Anteilseigner von Whitestone mit 9,4% Eigentum kritisiert MCB die Verfestigung des Vorstands und den Mangel an strategischen Überprüfungsprozessen. Das Unternehmen droht mit einer möglichen Abberufung des Vorstands auf der nächsten Hauptversammlung, wenn das Muster der Verzögerungen anhält.
- MCB's offer represented a significant 61.8% premium to pre-Fortress proposal price
- Two new independent trustees (Kristian M. Gathright and Donald A. Miller) added to the board
- MCB maintains significant shareholding (9.4%) to influence future decisions
- Board's refusal to engage in acquisition talks or strategic review process
- Management's apparent entrenchment affecting shareholder value
- Potential corporate governance issues indicated by board's resistance to explore value-maximizing opportunities
Insights
This withdrawal of MCB's
The board's resistance to exploring strategic alternatives, despite holding fiduciary duties to shareholders, could expose them to potential shareholder litigation. MCB's threat to seek board removal at the next annual meeting and the addition of new independent trustees could catalyze changes in corporate governance or force consideration of strategic alternatives. This development may negatively impact Whitestone's share price in the short term as merger arbitrage positions unwind.
The board's conduct raises serious corporate governance red flags. Their categorical rejection of engagement with a significant shareholder (
The recent appointment of two independent trustees, Gathright and Miller, could shift board dynamics. However, the current entrenchment suggests possible agency conflicts where management's interests may not align with shareholders. The threat of a proxy fight and board removal adds pressure for governance reforms or strategic alternatives consideration.
Calls on Independent Trustees of Whitestone to Initiate Strategic Review Process to Maximize Value for Whitestone Shareholders
Reminds Trustees of the Whitestone Board's Fiduciary Duties
MCB sent the following letter to the Whitestone Board:
November 18, 2024
Board of Trustees
C/O David K. Holeman
Whitestone REIT
2600 S. Gessner Rd, Suite 500
Dear Whitestone REIT Board of Trustees:
MCB Real Estate ("MCB" or "we") delivered an attractive, fully-financed proposal to the Whitestone Board to acquire Whitestone for
While we continue to believe our proposal is the best path forward for shareholders, our attempts to engage have been rebuffed at every turn, so we are withdrawing our proposal to acquire Whitestone at this time.
This is not a decision taken lightly. We are disappointed and disturbed at the Board's intransigence, entrenchment and apparent self-interest. The Company's recent public comments make it painfully clear that the Board is not open-minded or even willing to give real consideration to opportunities to advance shareholders' best interests.
Just a few weeks ago, Whitestone defended its entrenched position with unsupported and unrealistic claims of Whitestone's greater hypothetical "intrinsic value." Notably, however, that value was not actually provided, proven or even explained. Whitestone also attempted to rationalize the Board's refusal to consider alternatives by relying on a period of stock price outperformance that was driven by multiple acquisition rumors and proposals, including ours, that inflated Whitestone's share price.
When pressed on whether the Board is open to opportunities to enhance value on Whitestone's third quarter 2024 earnings call, Whitestone CEO David Holeman falsely asserted that the Board is actively looking at strategic options. Further, he seemingly didn't even understand what such a process to maximize value would actually entail. When asked, he said:
"I would tell you that our board reviews the best things for shareholders all the time. So we are actively looking at what are the best ways to add value, what are the best ways to produce a return to our shareholders. So I think we are actively doing that just like we should, and so I'm not sure I'm clear with your question."
Given the Board's refusal to engage with us regarding our proposal or conduct a process to explore whether other parties may have an interest in transacting with Whitestone, Mr. Holeman's comments are at best a naïve sidestep to the question, and at worst a downright lie to shareholders.
We have heard from a number of other shareholders that they are supportive of a potential transaction and share our frustration with the Whitestone Board. We believe some of these shareholders have reached out to Whitestone directly to demand answers. Unfortunately, it appears that the Whitestone Board has ignored these concerns and refused to engage with them, just as it has consistently refused to engage with MCB.
As Whitestone's largest actively managed shareholder, with ownership of 4,690,000 shares representing
The reputations and careers of these professionals, as well as the rest of the Board, are on the line, and we call on them to act in shareholders' best interests. We believe the inherent disadvantages of Whitestone as a standalone company, and the upside for shareholders from a well-run strategic review process, are obvious.
As we have said from the onset of this process, our interests are aligned with other Whitestone shareholders. Whitestone shareholders deserve a board that is committed to considering all opportunities to maximize value. If the Whitestone Board continues its pattern of delay and entrenchment, MCB believes the entire Board should be removed at the next annual meeting of shareholders.
While we are withdrawing our proposal at this time, we remain a significant shareholder of the company and will continue to consider all options available to MCB and other Whitestone shareholders to ensure that the Board upholds its responsibilities.
Sincerely,
/s/ P. David Bramble
P. David Bramble, Managing Partner
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 and 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
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Joele Frank, Wilkinson Brimmer Katcher
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SOURCE MCB Real Estate
FAQ
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