The Whitestone Board Has Summarily Rejected
and Refused to Engage Regarding MCB's Improved $15.00 per Share All-Cash Proposal, which would
Deliver a 14.5% Premium to Whitestone Shareholders
MCB Urges the Whitestone Board and Management
Team to Cease their Entrenchment Tactics
and Answer Shareholders' Questions
MCB Calls on Whitestone Shareholders to Make
their Voices Heard;
Visit www.MaximizingWhitestoneValue.com for
More Information
BALTIMORE, Oct. 31,
2024 /PRNewswire/ -- MCB Real Estate ("MCB"), a
leading commercial real estate developer and investment management
firm with a diverse nationwide portfolio and approximately
$3 billion in AUM, today issued the
following statement regarding its proposal to acquire Whitestone
REIT (NYSE: WSR) ("Whitestone") for $15.00 per share in cash:
MCB stands ready to deliver immediate and
certain value to Whitestone shareholders. Our proposal is
compelling by all reasonable metrics, reflecting a 14.5% premium to
Whitestone's share price prior to our initial proposal on
June 3, 2024, and a 61.8% premium to
Whitestone's unaffected share price prior to the rumored Fortress
proposal on October 26, 2023. Despite
an attractive proposal and our repeated attempts to engage over the
last several months, the Whitestone Board has steadfastly refused
to seriously consider our all-cash proposal.
In its rejection, Whitestone has conveniently
chosen a time period of total shareholder return that includes
multiple acquisition rumors and proposals, as well as MCB acquiring
4,690,000 shares on the open market. In the time between
January 18, 2022, when current
Whitestone management took over, and October
25, 2023, the day prior to the rumored Fortress proposal,
Whitestone delivered total shareholder returns of 0.1%. Since
October 25, 2023, Whitestone has
delivered total shareholder returns of 57.7%, driven by the rumored
Fortress Proposal, MCB's acquisition of shares starting on
May 7, 2024, and two acquisition
proposals from MCB.
We have heard from other shareholders that they
are supportive of a potential transaction and share our frustration
with the Whitestone Board. The Board's refusal to grant due
diligence, engage in any meaningful discussions, or commence a
strategic alternatives process is not consistent with its duties
and indicates that the Board is entrenched. Whitestone shareholders
deserve answers, and MCB encourages Whitestone to address the
following questions on its earnings call this morning, so that
shareholders can have all the facts regarding Whitestone's refusal
to engage or present a compelling path to maximize shareholder
value as a public company.
- What does the Whitestone Board believe the Company's net asset
value (NAV) to be?
- Whitestone has implied its NAV and discounted cash flow (DCF)
based on its internal forecasts indicate a higher "intrinsic value"
than provided by MCB's improved proposal – what are those
forecasts?
- Why not share the NAV and DCF forecasts with MCB or other
potential counterparties?
- What purchase price would the Board need to see in order to
grant due diligence?
- How can Whitestone's Board reasonably credit the management
team for the 60% total shareholder returns since the management
team was appointed, considering that total shareholder returns
during the period prior to takeover interest were almost zero?
- Given that MCB's purchases represent a significant portion of
WSR's trading volume over the course of 2024, what is Whitestone's
plan to maintain its share price if MCB withdraws its offer and
liquidates its position?
- Has Whitestone engaged with independent advisors or formed a
committee of the board to evaluate MCB's proposal or explore
strategic alternatives to maximize value? If not, why not?
- Is Whitestone's Board open to running a formal process to
evaluate strategic alternatives?
- How can the Board justify its refusal to engage with qualified
buyers, such as Fortress and MCB?
- Does Whitestone recognize its continued underperformance versus
its peers, and how does management intend to address Whitestone's
high cost of capital, high cost of borrowing and apparent inability
to raise new equity?
- Will the Whitestone Board and management team spend
shareholders' capital defending against a proxy contest again this
year? How can that be justified and why is that preferable to
engaging with well-capitalized potential acquirers?
Whitestone Third Quarter 2024 Conference Call Details
MCB urges Whitestone shareholders to join Whitestone's Third
Quarter 2024 earnings conference call to listen to the Whitestone
management team's responses to these and other questions. P.
David Bramble, Managing Partner of
MCB, will join the call and attempt to ask a question, but based on
Whitestone's refusal to engage to date, MCB expects to be rebuffed,
again, and is therefore calling on others in the investment
community to demand the answers shareholders deserve.
Dial-in number for domestic participants:
1-877-407-0784
Dial-in number for international participants: 1-201-689-8560
Passcode: 13742564
A live webcast of Whitestone's conference call
can be accessed at
https://ir.whitestonereit.com/corporate-profile/
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 in
connection with the transaction. 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 Baltimore,
Maryland. MCB boasts a nationwide portfolio of $3 Billion Assets Under Management totaling
approximately 15 million square-feet. of industrial, office,
retail, mixed-use, multi-family and life sciences properties with
almost four million square-feet in its development pipeline. The
firm offers a seamlessly integrated suite of commercial real estate
investment services, including development, construction, property
management, asset management, acquisitions, and legal expertise,
thus ensuring comprehensive support throughout every stage of an
asset's lifecycle. www.mcbrealestate.com.
Media Contacts
Andrew Siegel / Lucas Pers / Lyle
Weston
Joele Frank, Wilkinson Brimmer
Katcher
212-355-4449
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SOURCE MCB Real Estate