In its recent 1H 2024 fund update letter, Erez Asset Management, one of Whitestone REIT 's (NYSE:WSR) shareholders, said it sees a “likely change of control outcome” in the Houston, Texas-based REIT, sources that have seen the letter told Investing.com exclusively.
Recently, Investing.com found exclusively that Baltimore-based MCB Real Estate would be doubling down on its efforts to acquire WSR despite the rejection of its recent $14 a share, all-cash bid.
While that would represent a 7% premium over the company’s 52-week high of $13.08 prior to MCB’s official offer, WSR's management shunned the offer, claiming the “indicated price does not represent a fair valuation,” according to the rejection letter.
In its most recent letter, Erez Asset Management highlighted that while their proxy contest to replace two WSR board directors with their nominees wasn't successful, the two directors they targeted stepped down from the board. The proxy contest "achieved our objective of drawing attention to the company and within weeks of the shareholder vote Whitestone received a takeover proposal at $14/share," the firm added in the letter.
Amid takeover talks since October last year and solid buying activity from MCB itself, which now owns around 10% of WSR, the Texas-based REIT has largely outperformed its peers, jumping around 40% at a time the sector gained a much smaller 12%.
Erez's positive view of MCB's bid adds to the perception that the $14/share bid isn't as far from a "fair valuation" as WSR's board claimed in its rejection letter from June.
Moreover, insider sources consulted by Investing.com say that MCB may be willing to negotiate should WRS's Board display interest in engaging in the negotiation process.
While the bidder did not frontally confirm this, it noted that it is interested in pursuing further talks with Whitestone's Board.
“We urge the Whitestone Board to engage with us to negotiate a transaction that would allow the Company to maximize value for its shareholders,” MCB told Investing.com exclusively.