Whitestone REIT Adopts Short-Term Shareholder Rights Plan
May 15 2020 - 06:55AM
Whitestone REIT (NYSE: WSR) (“Whitestone” or the “Company”)
announced today that its Board of Trustees (the “Board”) has
approved a short-term shareholder rights plan (the “Plan”) to
protect the long-term interests of the Company and its
shareholders. The Board has adopted the Plan at this time due to
the substantial volatility in the market generally, and in trading
of the Company’s common shares of beneficial interest (the “Common
Shares”), that has resulted from the ongoing COVID-19 pandemic.
The adoption of the Plan by the Board is
intended to allow the Company to realize the long-term value of the
Company’s assets by protecting the Company from actions of third
parties that the Board determines are not in the best interest of
the Company and its shareholders. Given the current
unprecedented environment caused by the COVID-19 pandemic, as well
as the importance of maintaining focus on the strength of the
Company’s business, the Board believes that adopting the Plan is in
the best interests of the Company and its shareholders and will
contribute to the preservation of the Company’s long-term value for
its shareholders.
The Plan is similar to plans adopted by other
public companies, and is intended to promote the fair and equal
treatment of all shareholders by guarding against opportunistic
efforts to capitalize on recent macroeconomic conditions, including
open market accumulations or other tactics, aimed at gaining
control of the Company without paying an appropriate control
premium to deliver sufficient value for all Company shareholders.
Similar to plans adopted recently by other public companies, the
Plan is designed to reduce the likelihood that any person or group
would gain control of the Company through open market accumulation
of shares by imposing significant penalties upon any person or
group that acquires 5% or more of the outstanding Common Shares
(20% or more with respect to certain passive institutional
investors). The Plan is not intended to prevent or interfere with
any action that the Board determines to be in the best interest of
the Company and is designed to position the Board to fulfill its
duties on behalf of all shareholders by ensuring that the Board has
sufficient time to make informed judgments about any takeover
attempts and to encourage anyone seeking to gain a controlling
interest in the Company to negotiate prior to attempting a
takeover. The Plan has not been adopted in response to any specific
takeover bid or other proposal to acquire control of the
Company.
By the terms of the Plan, the rights will
initially trade with the Common Shares and will generally only
become exercisable on the 10th business day after a person or
entity has become the owner of 5% or more of the Common Shares (20%
or more with respect to certain passive institutional investors) or
the commencement of a tender or exchange offer which would result
in any person becoming an owner of 5% or more of the Common
Shares.
The Plan will expire on the earliest of (i) the
close of business on May 13, 2021, (ii) the time at which the
Rights are redeemed pursuant to the Rights Agreement, (iii) the
closing of any merger or other acquisition transaction involving
the Company that has been approved by the Board, at which time the
Rights are terminated, and (iv) the time at which the Rights are
exchanged pursuant to the Rights Agreement.
Additional details regarding the Plan are
contained in a Current Report on Form 8-K filed by the Company on
May 15, 2020 with the U.S. Securities and Exchange Commission
(“SEC”). The filing will be available on the SEC’s website at
www.sec.gov and in the Investor Relations section of the Company’s
website at www.whitestonereit.com.
About Whitestone REIT
Whitestone is a community-centered retail REIT
that acquires, owns, manages, develops and redevelops high quality
"e-commerce resistant" neighborhood, community and lifestyle retail
centers principally located in the largest, fastest-growing and
most affluent markets in the Sunbelt. Whitestone’s optimal mix of
national, regional and local tenants provides daily necessities,
needed services and entertainment to the communities in which they
are located. Whitestone's properties are primarily located in
business-friendly Phoenix, Austin, Dallas-Fort Worth, Houston and
San Antonio, which are among the fastest growing U.S. population
centers with highly educated workforces, high household incomes and
strong job growth. For additional information,
visit www.whitestonereit.com.
Forward-Looking Statements
Certain statements contained in this press
release constitute forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended (the
“Securities Act”) and Section 21E of the Securities Exchange Act of
1934, as amended (the “Exchange Act”). The Company intends for all
such forward-looking statements to be covered by the safe-harbor
provisions for forward-looking statements contained in Section 27A
of the Securities Act and Section 21E of the Exchange Act, as
applicable. Such information is subject to certain risks and
uncertainties, as well as known and unknown risks, which could
cause actual results to differ materially from those projected or
anticipated. Therefore, such statements are not intended to be a
guarantee of our performance in future periods. Such
forward-looking statements include statements about our earnings
guidance, future liquidity, performance growth and expectations and
other matters and can generally be identified by the Company’s use
of forward-looking terminology, such as “may,” “will,” “plan,”
“expect,” “intend,” “anticipate,” “believe,” “continue,” “goals” or
similar words or phrases that are predictions of future events or
trends and which do not relate solely to historical matters.
The following are additional factors that could
cause the Company's actual results and its expectations to differ
materially from those described in the Company's forward-looking
statements: uncertainties related to the COVID-19 pandemic,
including the unknown duration and economic, operational and
financial impacts of the COVID-19 pandemic and the actions taken or
contemplated by U.S. and local governmental authorities or others
in response to the pandemic on the Company’s business, employees
and tenants, including, among others, (a) changes in tenant demand
for the Company’s properties, (b) financial challenges confronting
major tenants, including as a result of decreased customers’
willingness to frequent, and mandated stay in place orders that
have prevented customers from frequenting, some of Company’s
tenants’ businesses and the impact of these issues on the Company’s
ability to collect rent from its tenants; (c) operational changes
implemented by the Company, including remote working arrangements,
which may put increased strain on IT systems and create increased
vulnerability to cybersecurity incidents, (d) significant reduction
in the Company’s liquidity due to the lack of further availability
under its revolving credit facility and limited ability to access
the capital markets and other sources of financing on attractive
terms or at all, and (e) prolonged measures to contain the spread
of COVID-19 or the premature easing of government-imposed
restrictions implemented to contain the spread of COVID-19; the
imposition of federal income taxes if we fail to qualify as a real
estate investment trust (“REIT”) in any taxable year or forego an
opportunity to ensure REIT status; the Company's ability to meet
its long-term goals, its assumptions regarding its earnings
guidance, including its ability to execute effectively its
acquisition and disposition strategy, to continue to execute its
development pipeline on schedule and at the expected costs, and its
ability to grow its NOI as expected, which could be impacted by a
number of factors, including, among other things, its ability to
continue to renew leases or re-let space on attractive terms and to
otherwise address its leasing rollover; its ability to successfully
identify, finance and consummate suitable acquisitions, and the
impact of such acquisitions, including financing developments,
capitalization rates and internal rates of return; the Company’s
ability to reduce or otherwise effectively manage its general and
administrative expenses; the Company’s ability to fund from cash
flows or otherwise distributions to its shareholders at current
rates or at all; current adverse market and economic conditions;
lease terminations or lease defaults; the impact of competition on
the Company's efforts to renew existing leases; changes in the
economies and other conditions of the specific markets in which the
Company operates; economic, legislative and regulatory changes,
including changes to laws governing REITs and the impact of the
legislation commonly known as the Tax Cuts and Jobs Act; the
success of the Company's real estate strategies and investment
objectives; the Company's ability to continue to qualify as a REIT
under the Internal Revenue Code of 1986, as amended; and other
factors detailed in the Company's most recent Annual Report on Form
10-K, Quarterly Reports on Form 10-Q and other documents the
Company files with the Securities and Exchange Commission from time
to time.
Contact Whitestone REIT: Kevin Reed Director of
Investor Relations (713) 435-2219 ir@whitestonereit.com
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