Whitestone REIT Rejects $1.45 Billion Buyout Offer

Whitestone REIT rejected a billion-dollar buyout proposal this week, rebuffing the latest offer to take the investment firm private.

MCB Real Estate offered $1.45 billion, but that fell short of Whitestone’s valuation expectations, the Houston Business Journal reported.

Baltimore-based MCB, led by co-founders David Bramble and Peter Pinkard, initially bid $14 per share but raised its offer to $15 in an attempt to appeal to Whitestone’s trustees.

Whitestone, a trust managing 57 shopping centers in Texas and Arizona, maintained that its market positioning and 60 percent stock growth since 2022 justified a more comprehensive valuation beyond mere market metrics.

“The Whitestone Board of Trustees has unanimously determined to reject your indication of interest and does not believe it reflects an appropriate valuation to enter into discussions toward a negotiated transaction,” Whitestone stated in a news release.

MCB, an investment management firm with a 9.4 percent stake in Whitestone, responded, arguing that its proposal offered a 14.5 percent premium over its June 3 share price of $13.10.

As the third-largest shareholder, the firm contends that Whitestone’s stock has been artificially inflated due to its own acquisition of 4.6 million shares and various takeover rumors. To support its acquisition strategy, MCB launched the website MaximizingWhitestoneValue.com, suggesting that Whitestone’s stock performance had been largely influenced by external factors.

MCB outlined 11 questions it expected Whitestone to address during an earnings call this week, including its net asset value and measures to support its stock if the company decided to sell its shares.

“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,” MCB said.

Whitestone was caught in a proxy battle earlier this year with investor Erez Asset Management. That was rooted in Whitestone’s rejection of a buyout attempt by Fortress Investment Group, an offer was reportedly a premium to the market price of shares at the time.

MCB holds a $3 billion portfolio which includes retail, industrial, multifamily, office, mixed-use, and science and health assets.

Its subsidiary MCB Science + Health recently acquired the iMed Naperville Medical Office, a four-story medical office building in suburban Chicago.

— Andrew Terrell