MCB Real Estate Calls on Whitestone REIT Board to Initiate Strategic Review Process to Maximize Value for Whitestone Shareholders

Whitestone shareholders deserve a board that is committed to considering all opportunities to maximize value

On November 18, 2024, 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 – withdrew the revised proposal to acquire all outstanding shares of Whitestone REIT (NYSE: WSR) (“Whitestone”) for $15.00 per share in cash that MCB made on October 9, 2024.

Read the letter MCB sent to the Whitestone Board regarding the revised proposal

We attempted on numerous occasions to engage with the Whitestone Board and management team to work toward a transaction that would maximize value for Whitestone shareholders. While we continue to believe our proposal is the best path forward for shareholders, our attempts to engage have been rebuffed at every turn.

Whitestone 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.

MCB's interests aligned with other Whitestone shareholders'

  • 3rd largest Whitestone shareholder and largest actively managed shareholder
  • 4,690,000 shares representing 9.4% of Whitestone’s common shares

We are focused on maximizing shareholder value, and will consider all options available to MCB and other Whitestone shareholders to ensure that the Board upholds its responsibilities.

MCB asks fellow shareholders to urge the Whitestone Board to uphold its fiduciary duties and initiate a strategic review process to maximize value for Whitestone shareholders.

Read the letter MCB sent to the Whitestone Board regarding its withdrawal of the revised proposal

MCB continues to believe its all-cash proposal would have provided compelling and certain value to Whitestone shareholders

$15.00
Per Share in Cash
14.5%
Premium Compared to Share Price Prior to Initial Proposal1
61.8%
Premium to Whitestone’s Unaffected Share Price Prior to Takeover Rumors2
[1] Relative to WSR share price as of June 3, 2024, the last trading day prior to the disclosure of MCB’s initial proposal
[2] Relative to WSR share price as of October 25, 2023, prior to the rumored Fortress proposal reported on October 26, 2023
Importantly, Whitestone has NOT closed above $15.00 per share since 2016

Whitestone’s stock has noticeably underperformed Peers3 since MCB submitted its initial proposal of $14.00 per share.4

[4] Market data as of November 15, 2024

Since MCB's initial proposal on June 3, 2024

[3] Peers defined as AKR, BRX, FRT, IVT, KIM, KRG, PECO, REG, UE.

Whitestone’s current 13.4x consensus NTM FFO multiple is 2.3 multiple turns lower than Peers, compared to 0.5x lower than Peers at the time of the initial proposal.

This large discount to Peers is consistent with the long-term historical average and is reflective of Whitestone’s small capitalization and trading float, limited growth prospects and weaker overall asset quality relative to the Peer group.

Standalone Whitestone is constrained by inherent disadvantages

Whitestone is burdened with a cost of capital disadvantage relative to its public and private peers.

The expensive cost of equity and cost of borrowing make it a challenge for Whitestone to raise any new capital to fund acquisitions, developments or redevelopments, or tenant buyouts and asset repositioning.

To preserve capital for growth initiatives, Whitestone cut its dividend in April 2020 and has a lower dividend yield than the majority of Peers.

These are the fundamental drivers of value creation for shareholders and illustrate why the Company should not remain public. The upside for shareholders from a well-run strategic review process is obvious.

Press Releases

November 18, 2024
MCB Withdraws Proposal to Acquire Whitestone Due to Whitestone Board’s Entrenchment and Refusal to Engage
Read Release
October 31, 2024
MCB Calls on Whitestone to Maximize Shareholder Value
Read Release
October 9, 2024
MCB Real Estate Increases Proposal to Acquire Whitestone REIT to $15.00 Per Share in Cash and Seeks Board Engagement
Read Release