Monmouth Management Board Confirms Share Merger Again

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Starwood CEO Barry Sternlicht and Equity Founder Sam Zell (Getty)

Starwood CEO Barry Sternlicht and Equity Founder Sam Zell (Getty)

Drama over the future of Monmouth Real Estate The company’s board of directors has once again confirmed its choice in favor of the merger with Sam Zell’s Equity Commonwealth.

The company announced unanimous board support for the EQC proposal in a press release on Monday, saying the board had consulted with financial and legal advisors before agreeing that Equity’s proposal outperformed Barry Sterlincht’s Starwood proposal.

The main reason that the board of directors sided with EQC is the payment to Monmouth shareholders at $ 19 per share in the event of a merger. Starwood’s proposal, however, called for a net cash payment of $ 19.20 per share adjusted for termination fees upon withdrawal from the EQC agreement.

Other reasons cited by Monmouth’s board of directors include long-term growth potential, the track record of EQC executives such as Zell and CEO David Helfand, and access to EQC’s financial resources, including $ 2.5 billion in notional cash.

“We are confident that the EQC deal will bring great long-term benefits and also provide an opportunity to accommodate the preferences of our diverse shareholder base,” said Brian Heimm, lead independent director at Monmouth.

Starwood reacted to Monmouth’s decision on Tuesday by expressing disappointment and promising to remain prepared for an attack if the EQC merger fails a vote.

“Starwood stands ready to work with the Monmouth Board, sign the already agreed merger agreement that it has provided to Monmouth, and quickly proceed with the completion of our proposed deal,” Starwood said in a statement.

Last week Starwood raised takeover bid for a REIT in Holmdel, NJ. Monmouth previously confirmed in July that it will be sold to EQC after a previous offer from Starwood has been made without a request.

When Equity raised its bid ahead of the previous Starwood volley, Monmouth investor Blackwells Capital opposed the EQC acquisition. A total of 120 industrial sites are on the table in successful acquisitions.

Monmouth shareholders vote is scheduled for August 31st.

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