MCB Real Estate Increases Proposal to Acquire Whitestone REIT to $15.00 Per Share in Cash and Seeks Board Engagement

Core Viewpoint - MCB Real Estate has proposed an all-cash acquisition of Whitestone REIT at $15.00 per share, representing significant premiums over various historical share prices, aiming to maximize shareholder value [1][2][5]. Proposal Details - The revised proposal offers $15.00 per share, which is a 14.5% premium to Whitestone's share price as of June 3, 2024, an 11.4% premium to the last trading price, and a 61.8% premium to the price prior to the rumored Fortress proposal in October 2023 [2][5]. - MCB's proposal is not contingent on financing, indicating strong financial backing for the acquisition [2][13]. Shareholder Engagement - MCB, as the third largest Whitestone shareholder, emphasizes alignment with other shareholders and urges the Whitestone Board to engage in discussions to maximize value [3][6]. - The company has faced challenges in engaging with Whitestone's management but remains committed to pursuing the acquisition [11][12]. Market Performance - Since the initial proposal on June 3, 2024, Whitestone's stock has underperformed compared to its peers, with a 2.8% increase in its share price versus a 17.7% increase for peer companies [7]. - Whitestone's share price has not exceeded $15.00 since 2016, highlighting the significance of MCB's offer [5][11]. Financial Metrics - Whitestone's current consensus NTM FFO multiple is 12.8x, which is 2.3 turns lower than its peers, reflecting a trading discount due to its small capitalization and limited growth prospects [9]. - The company's cost of capital is a disadvantage compared to peers, with a borrowing rate above 6.5%, which limits its ability to raise new capital for growth initiatives [10]. Commitment to Acquisition - MCB has received a Highly Confident Letter from Wells Fargo regarding the debt financing needed for the acquisition, ensuring that the proposal is well-supported financially [13]. - The firm expresses confidence that the improved offer represents a compelling opportunity for Whitestone shareholders [14].