MCB Real Estate Boosts Whitestone REIT Takeover Bid to $1.45B

MCB Real Estate badly wants Whitestone REIT under its wing, and has upped its takeover bid to $1.45 billion including assumed debt.

Baltimore-based MCB has offered to buy the Houston-based real estate investment trust for $15 per share, or about $751 million in cash, according to the Business Journals. MCB would also assume the REIT’s approximately $677 million of debt, bringing the total value of the offer to nearly $1.5 billion. MCB claimed in an announcement Wednesday that it had received a letter of confidence from Wells Fargo (WFC) to secure the financing it would need for the takeover. 

Whitestone’s retail-centric portfolio includes 57 properties across Arizona and Texas with a combined 5.1 million square feet of leasable area as of the end of June, according to its second-quarter earnings report. 

The new offer is more than the $14-per-share bid MCB made for Whitestone earlier this summer, but which the REIT ultimately rejected. MCB noted that Whitestone’s stock had “underperformed” in the months since the first offer, though the REIT’s share price notably rose from $13.47 at market close Tuesday to $14.34 on Wednesday afternoon following MCB’s proclamation. 

“As the third-largest Whitestone shareholder and largest actively managed shareholder, our interests are aligned with the company’s other owners and we are committed to pursuing a transaction that maximizes value,” P. David Bramble, MCB’s co-founder and managing partner, said in a statement. “Our efforts to engage in constructive discussions have been rebuffed to date, but we stand ready to complete due diligence and execute a definitive agreement expeditiously and are committed to seeing this through to completion.”

A representative for Whitestone did not immediately respond to a request for comment, and a spokesperson for MCB did not immediately respond to a request for more information about the offer. 

MCB’s effort to acquire Whitestone comes in the wake of Erez Asset Management Chairman Bruce Schanzer’s attempt earlier this year to join the REIT’s board, along with his business partner Cathy Clark. Whitestone’s board at the time framed Schanzer’s move as a “proxy contest” and a takeover, though was ultimately rebuffed during Whitestone’s annual shareholder meeting.

MCB on Wednesday also claimed its offer was a 61.8 percent premium to Whitestone’s share price preceding the “rumored” takeover proposal made by Fortress Investment Group last fall, which was reported by Bloomberg at the time. 

Nick Trombola can be reached at ntrombola@commercialobserver.com.