Calls on Independent Trustees
of Whitestone to Initiate Strategic Review Process to Maximize
Value for Whitestone Shareholders
Reminds Trustees of the Whitestone
Board's Fiduciary Duties
BALTIMORE, Nov. 18,
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 sent a
letter to the Board of Trustees of Whitestone REIT (NYSE: WSR)
("Whitestone") withdrawing MCB's previously announced proposal to
acquire the company.
MCB sent the following letter to the Whitestone Board:
November 18,
2024
Board of Trustees
C/O David K. Holeman
Whitestone REIT
2600 S. Gessner Rd, Suite 500
Houston, TX 77063
Dear Whitestone REIT Board of Trustees:
MCB Real Estate ("MCB" or "we") delivered an
attractive, fully-financed proposal to the Whitestone Board to
acquire Whitestone for $15 per share
in an all-cash transaction. Our proposal would maximize value to
Whitestone's shareholders, delivering immediate and certain value
in the form of 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. We have made repeated efforts to engage with the
Whitestone Board over the last several months, but each of those
attempts has been summarily rebuffed. 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 a boardroom culture of entrenchment.
While we continue to believe our proposal is the
best path forward for shareholders, our attempts to engage have
been rebuffed at every turn, so we are withdrawing our proposal to
acquire Whitestone at this time.
This is not a decision taken lightly. We are
disappointed and disturbed at the Board's intransigence,
entrenchment and apparent self-interest. The Company's recent
public comments make it painfully clear that the Board is not
open-minded or even willing to give real consideration to
opportunities to advance shareholders' best interests.
Just a few weeks ago, Whitestone defended
its entrenched position with unsupported and unrealistic claims of
Whitestone's greater hypothetical "intrinsic value." Notably,
however, that value was not actually provided, proven or even
explained. 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.
When pressed on whether the Board is open to
opportunities to enhance value on Whitestone's third quarter
2024 earnings call, Whitestone CEO David
Holeman falsely asserted that the Board is actively looking
at strategic options. Further, he seemingly didn't even understand
what such a process to maximize value would actually entail. When
asked, he said:
"I would tell you that our board reviews the
best things for shareholders all the time. So we are actively
looking at what are the best ways to add value, what are the best
ways to produce a return to our shareholders. So I think we
are actively doing that just like we should, and so I'm not sure
I'm clear with your question."
Given the Board's refusal to engage with us
regarding our proposal or conduct a process to explore whether
other parties may have an interest in transacting
with Whitestone, Mr. Holeman's comments are at best a naïve
sidestep to the question, and at worst a downright lie to
shareholders.
We have heard from a number of other
shareholders that they are supportive of a potential transaction
and share our frustration with the Whitestone Board. We believe
some of these shareholders have reached out to Whitestone directly
to demand answers. Unfortunately, it appears that the Whitestone
Board has ignored these concerns and refused to engage with them,
just as it has consistently refused to engage with MCB.
As Whitestone's largest actively managed
shareholder, with ownership of 4,690,000 shares representing 9.4%
of Whitestone's common shares, we note the addition of Kristian M. Gathright and Donald A. Miller to the Whitestone Board. Ms.
Gathright and Mr. Miller are two new and well-regarded independent
trustees whom we hope will bring fresh perspective to the Board and
ensure that the Whitestone Board acts in accordance with its
fiduciary duties, including taking appropriate steps to maximize
value for Whitestone shareholders.
The reputations and careers of these
professionals, as well as the rest of the Board, are on the line,
and we call on them to act in shareholders' best interests. We
believe the inherent disadvantages of Whitestone as a standalone
company, and the upside for shareholders from a well-run strategic
review process, are obvious.
As we have said from the onset of this process,
our interests are aligned with other Whitestone shareholders.
Whitestone shareholders deserve a board that is committed to
considering all opportunities to maximize value. If the Whitestone
Board continues its pattern of delay and entrenchment, MCB believes
the entire Board should be removed at the next annual meeting of
shareholders.
While we are withdrawing our proposal at this
time, we remain a significant shareholder of the company and will
continue to consider all options available to MCB and other
Whitestone shareholders to ensure that the Board upholds its
responsibilities.
Sincerely,
/s/ P. David
Bramble
P. David Bramble, Managing
Partner
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 and
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