MCB Backs Down From Whitestone REIT Takeover Attempt

MCB Real Estate is taking its offer off the table.

After an attempt to take Whitestone REIT private, David Bramble’s MCB is withdrawing its proposal, according to a release from the Baltimore-based investment management firm.

MCB, Whitestone’s third-largest shareholder with a 9.4 percent stake in the firm, offered $14 per share in June and upped the bid to $15 a share in October.

The deal was worth about $1.45 billion, factoring in the Houston-based retail investor’s $667 million debt load.

Whitestone rebuffed the increased offer, claiming it fell short of the REIT’s expectations, the Houston Business Journal reported.

Bramble blamed the decision on the Whitestone board’s “intransigence, entrenchment and apparent self-interest” in a letter to the board dated today.

The board’s sense of the REIT’s worth is based on an inflated stock price, he said.

“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.”

Moreover, the board never identified a number it would accept, Bramble wrote.

The letter also called on newly appointed independent board members Kristian Gathright and Donald Miller to act in shareholders’ best interests.

MCB’s efforts followed Whitestone’s proxy battle with Erez Asset Management, which had a 1.3 percent stake in the REIT.

In May, shareholders denied Erez’s two outside nominees in the election to Whitestone’s board.

Whitestone fired then-CEO James Mastandrea in 2022; he later sued, claiming he was fired because he was negotiating to sell the REIT.

As of Oct. 30, Whitestone owned 55 retail properties, with an average occupancy rate of 94.1 percent across the portfolio. Its portfolio properties are located in Phoenix, Dallas-Fort Worth, Houston and San Antonio.

The takeover would’ve been a major expansion for MCB, which manages $3 billion in assets.