Equity Commonwealth and Starwood are pushing hard to see Monmouth expand into arguably the most popular real estate sector today: industrial property. Amid the rapid growth of e-commerce and logistics, the demand for warehouse space takes off… It’s the same with property values - one of the reasons many in the real estate industry were surprised to see Zell, known for buying up disgraceful assets at low prices, cut the deal for Monmouth. in May.
Now he is fighting a trade war with Barry Sternlicht. Starwood took advantage earlier this month when the influential consulting firm Institutional Shareholder Services recommended that Monmouth shareholders vote against the sale of Equity Commonwealth. ISS writes that Starwood’s competing offering offers “greater value and reliability.”
The revised $ 3.4 billion Equity Commonwealth proposal could have garnered the backing of some Monmouth shareholders who planned to follow the advice. Equity Commonwealth, a Chicago-based real estate investment fund, originally offered to buy Monmouth, a REIT out of Holmdel, NJ, along with its shares, which meant the deal value would fluctuate based on the price of Equity Commonwealth’s stock. Starwood argued that its deal was better because it would have paid more, $ 18.88 a share, in cash, not in stock.
Rule of Monmouth stuck with Equity Commonwealth, but there is no guarantee that the shareholders of the company will do so. Dissident investor Blackwells Capital, which owns 4.2% of Monmouth shares, planned to vote against the original proposal and recently called on other shareholders to oppose it as well.
Equity Commonwealth released its revised proposal at a special shareholders’ meeting in Monmouth this morning to address the sale. Monmouth shareholders can now choose to receive $ 19 in cash for their shares or pay in Equity Commonwealth shares.
“Our revised offering provides Monmouth shareholders with the option to receive cash incentives, but also provides an opportunity to continue investing in the future growth of our business,” Equity Commonwealth President and CEO David Helfand said in a statement. “We will continue to have a significant balance sheet capacity of over $ 4 billion for future industrial investments.”
A spokesman for Starwood Real Estate Income Trust, a subsidiary of Starwood Capital that offered to buy Monmouth, did not respond to a request for comment.
Monmouth has postponed its EGM to sell its Equity Commonwealth to August 31st. This gives Sternlicht, chairman of the board of directors of Starwood Real Estate Income, an extra week to plan his next move.
Equity Commonwealth shares rose 16 cents, or 0.6 percent, to $ 26.81. Monmouth shares closed at $ 19.10, up 13 cents, or 7 percent.