Starwood increases offer to acquire Monmouth Real Estate Investment Corp. up to net cash consideration of USD 19.20 per share

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MIAMI – () – Starwood Real Estate Income Trust, Inc. (“Starwood”), a subsidiary of Starwood Capital Group, a leading global private equity firm specializing in real estate and energy investments, today announced an expanded fully cash, fully funded, full offer to acquire Monmouth Real Estate Investment Corporation (NYSE: MNR) ( “Monmouth”) at $ 19.93 per share of Monmouth less the termination fee due to Equity Commonwealth (“EQC”) of $ 72 million or $ 0.73 per share. Starwood’s expanded offering will provide a net remuneration of $ 19.20 per share to Monmouth shareholders following the payment of an EQC termination fee, which was increased by $ 10 million by the Monmouth Board of Directors on August 16, 2021. Starwood Offering Offers Monmouth Shareholders A Bonus On The Revised EQC Offer At 100% Certain Cash Value (vs.one), and does not expose Monmouth shareholders to the uncertain and unjustified future value creation resulting from the EQC deal, which is already worth less to shareholders given the decline in EQC shares since its revised offer was announced.

Ethan Bing, managing director of Starwood, said: “Our increased ‘all-in-cash’ offer outperforms the revised EQC offering, given a higher defined value that is not subject to market risk or is subject to unsubstantiated performance. The EQC proposal requires Monmouth shareholders to give up confidence in our higher cash supply in exchange for creating speculative value from the combined company with no synergy and no clear competitive advantage in a highly competitive industrial sector in which EQC was not actively involved. ”

Starwood is not alone in its criticism. Many third parties highlighted EQC’s lack of industrial experience and expressed skepticism about the uncertain prospects for the EQC deal.2:

  • Considering [EQC]a limited presence in industrial real estate and a notable gap between EQC’s recent history of industrial acquisitions and the billions of dollars in acquisitions planned for the combined company, there remains significant uncertainty as to whether the combined entity will be able to realize its post-transaction opportunities. advertised by the board of the Ministry of Natural Resources “. (Institutional Shareholder Services Inc. (“ISS”) report, August 6, 2021)
  • Our views on the combination remain unchanged since the key issue is the competitive advantage of EQC in a highly competitive industrial space and now with less dry powder to stimulate future growth. ” (Citi Research report, August 16, 2021)

Bing added: “The Monmouth board, whose initial process chaired a strategic alternatives committee that ISS rightly criticized as “not fully independent,” appears to be committed to the interests of Monmouth insiders rather than their fiduciary duty to maximize value for all Monmouth shareholders. Monmouth’s board decision to increase the termination fee for EQC without engaging in a single conversation with an interested party offering all the funds, already having a significant premium over EQC, is another disappointing breach of its shareholder trust – a clear attempt to protect EQC from competing bidders wishing to offer higher and more defined value to Monmouth shareholders. In contrast, Starwood did not raise the termination fee in connection with its revised proposal. ”

Bing concluded: “We are ready to sign the already agreed merger agreement with Monmouth. We urge the Monmouth Management Board to act in the best interest of all of its shareholders by immediately announcing our increased offer better, refraining from any future action that would deprive shareholders of the opportunity to realize maximum value, and quickly proceed to complete our proposed transaction for the benefit of all Monmouth shareholders. … ”

The full text of Starwood’s letter to the Monmouth Board regarding its expanded proposal is included below:

***

August 18, 2021

Monmouth Real Estate Investment Corporation

101 Crawfords Corner Road, office 1405

Holmdel, NJ 07733

Note: Eugene W. Landy, Chairman of the Board

On behalf of Starwood Real Estate Income Trust, Inc. (“Starwood” or “we”) we are pleased to present this fully cash-funded and fully enforceable enhanced offer for the acquisition of all outstanding common shares of Monmouth Real Estate. Investment Corporation (“Monmouth”).

We hereby increase our purchase price to $ 19.93 per share in cash at close, minus your increased termination fee due to EQC of $ 0.73 per share, with a net cash consideration of $ 19.20 per share for shareholders Monmouth. All other terms of this offer are in line with the merger agreement we previously presented to you in July. Specifically, this offer allows Monmouth shareholders to continue to receive dividends following the close of the Starwood deal without any reduction in the cost of the merger. In addition, we are not increasing our termination fee from $ 62 million, despite the great value this offer offers to Monmouth shareholders and your recent decision to redirect more shareholder value to EQC in the form of a higher termination fee.

With the above price increases, our all-cash improved offering definitely delivers more value and confidence for Monmouth shareholders than the revised EQC deal announced on Aug 16, which is still based on the speculative potential of a merger between the two companies with no apparent synergy or competitive advantage. to the manufacturing sector. We urge the Board of Directors of Monmouth to immediately declare our proposal a “Excellent Proposal” in accordance with the existing merger agreement with EQC and to move on a path that will bring some maximum value to your shareholders and lead to the efficient completion of this lengthy process at no additional cost. additional unjustified expenses.

We are ready to sign the already agreed merger agreement with you and complete the transaction that will benefit all Monmouth shareholders.

Thanks for your continued attention.

Sincerely,

Starwood Real Estate Income Trust, Inc.

Christopher Graham

Ethan B. Bing

Investment Director

Manager

If you have questions about how to vote with your shares, please contact:

INNISFREE M&A INCORPORATED

Shareholders call toll-free at (877) 750-0625.

Banks and brokers call and collect: (212) 750-5833

About Starwood Capital Group

Starwood Capital Group is a privately held investment company specializing in global real estate, energy infrastructure and oil and gas. The firm and its affiliates have 16 offices in seven countries around the world and currently have about 4,000 employees. Since its founding in 1991, Starwood Capital Group has raised over $ 60 billion in capital and currently manages approximately $ 90 billion in assets. Through a series of joint opportunity funds and Starwood Real Estate Income Trust, Inc. (SREIT), a non-REIT listed, the Firm has invested in virtually all real estate categories globally, changing asset classes, geography and location. in the capital stack, as it perceives the risk / reward dynamics as evolving. Starwood Capital also operates Starwood Property Trust (NYSE: STWD), the largest commercial mortgage investment fund in the United States, which has successfully invested over $ 69 billion in equity since its inception and manages a portfolio of over $ 18 billion in debt and equity investments. … Over the past 29 years, Starwood Capital Group and its affiliates have successfully implemented an investment strategy of building businesses in both the private and public markets. More information can be found on the website starwoodcapital.com

one Based on the closing price of EQC common stock of $ 26.20 per share as of 18 Aug 2021.

2 Permission to use quotes has not been requested or received.

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