PORT WASHINGTON, N.Y.,
Nov. 27, 2017 /PRNewswire/ -- Cedar
Realty Trust, Inc. (NYSE: CDR) ("Cedar" or the "Company") today
announced that its Board of Directors has received and unanimously
rejected an unsolicited and unrealistic proposal from Wheeler Real
Estate Investment Trust (NASDAQ: WHLR) ("Wheeler") to evaluate
opportunities to combine the two companies. The Cedar Board of
Directors fully reviewed Wheeler's unsolicited proposal in
consultation with its advisors and unanimously concluded that it is
not in the best interest of shareholders for Cedar to enter into
discussions with Wheeler.
The Board of Directors communicated its response to Wheeler in a
letter sent to its Chairman of the Board on November 26, 2017, the full text of which
follows:
November 26, 2017
Jon S. Wheeler
Wheeler REIT, Inc.
Riversedge North
2529 Virginia Beach Boulevard
Virginia Beach, VA 23452
Re: Response to
Proposal for Strategic Transaction
Dear Mr. Wheeler:
We thank you for your interest in exploring a strategic
transaction with Cedar, an overture which we understand is
encouraged by Snow Park Capital, one of our newer
shareholders. For the reasons noted below, Cedar's Board of
Directors has determined that it would not be in the best interest
of Cedar and its shareholders to pursue your proposal.
Cedar routinely evaluates strategic options to enhance long-term
value. To this end, Cedar's Board of Directors is committed
to considering any credible strategic alternative that would
maximize value for our shareholders. We have sincere
reservations, however, as to how an acquisition of Cedar by Wheeler
could possibly create value for Cedar shareholders. Of
particular concern are the following factors:
- Poor Returns and Financial Performance: Wheeler's total
shareholder returns have significantly underperformed both Cedar
and relevant indices. In addition, Wheeler has regularly missed
analyst estimates, including for the third quarter 2017.
- Dividend Sustainability: In May
2017, Wheeler cut its quarterly dividend by 19 percent,
reportedly due to its inability to generate sufficient cash
flows.
- Lower Quality Portfolio: Wheeler's portfolio comprises
class B and C assets in smaller, less attractive markets, which do
not fit with Cedar in terms of quality and geographic
positioning. Cedar has substantially repositioned its
portfolio – and continues to do so – by acquiring and redeveloping
high-quality core assets in high-density markets in the attractive
D.C. to Boston
corridor.
- Over-leveraged: Despite recent efforts to stabilize its
balance sheet, Wheeler remains highly leveraged with debt to EBITDA
of nearly 10 times.
- Incompatible Size: Cedar is a $1.35 billion company, with a current equity
market capitalization of approximately $550
million. Wheeler is a $375
million company with a current equity market capitalization
of approximately $95 million.
While there are instances where relative size differences may not
matter, the above factors demonstrate that in the instant case, the
size differences would be adversely consequential.
These are some, but certainly not all, of the reasons why the
Cedar Board of Directors has determined not to pursue your
proposal. Indeed, we wonder how Snow Park or any
well-intentioned Cedar shareholder could possibly think that a
transaction of this nature would be in the long-term best interest
of Cedar and its shareholders.
The Cedar Board and management team are committed to creating
and protecting value for all shareholders, and will continue to
take action to achieve that objective.
Sincerely,
Board of Directors of Cedar Realty Trust,
Inc.
/s/
By: Roger M. Widmann,
Chairman
About Cedar Realty Trust
Cedar Realty Trust, Inc. is a
fully-integrated real estate investment trust which focuses
primarily on the ownership and operation of grocery-anchored
shopping centers straddling the Washington D.C. to Boston corridor. The Company's portfolio
(excluding properties treated as "held for sale") comprises 61
properties, with approximately 9.0 million square feet of gross
leasable area.
Forward-Looking Statements
Statements made in this
press release that are not strictly historical are
"forward-looking" statements. Forward-looking statements involve
known and unknown risks, uncertainties and other factors which may
cause actual results, performance and outcomes to differ materially
from those expressed or implied in forward-looking statements.
Please refer to the documents filed by Cedar Realty Trust, Inc.
with the Securities and Exchange Commission (the "SEC"),
specifically the Company's Annual Report on Form 10-K for the year
ended December 31, 2016, as it may be
updated or supplemented in the Company's Quarterly Reports on Form
10-Q and the Company's other filings with the SEC, which identify
important risk factors that could cause actual results to differ
from those contained in forward-looking statements.
For additional financial and descriptive information on the
Company, its operations and its portfolio, please refer to the
Company's website at www.cedarrealtytrust.com.
Contact Information:
Cedar Realty Trust, Inc.
Investor Relations
Philip Mays
(516) 944-4572
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SOURCE Cedar Realty Trust, Inc.