Alternative investment management firm Blackwells Capital LLC and its affiliates have submitted an unsolicited offer to the Monmouth Real Estate Investment Corp.’s board for $18 per share, totaling approximately $3.8 billion including the assumption of debt.
Blackwells, a significant owner of the New Jersey-based industrial REIT, submitted its first all-cash offer to Monmouth Board Chairman Eugene Landy on December 1. The offer represents a 21.6% premium to the unaffected share price on that date, the company said.
“As a public company, Monmouth has significantly underperformed comparable industrial REITs over the last five years, further exacerbated by the stock’s lack of liquidity. Blackwells’ cash offer provides shareholders immediate liquidity at a 17% premium above consensus net asset value — though the stock has long traded at a discount to it,” said Jason Aintabi, Blackwells’ chief investment officer. “Our offer also represents a premium to unaffected price well above the average premium for completed REIT deals over the last five years.”
Aintabi claims he spoke with Monmouth CEO Michael Landy, Eugene Landy’s son after the initial offer, only to receive “a puzzling follow-up letter from … Eugene Landy, indicating that on second thought Monmouth would not engage with us, because exploring our offer would ‘not be in the best interests of the company.’ For myriad and tangible reasons, Monmouth in its current state, does not belong in the public markets. Pursuing our offer is the best way to maximize value for all Monmouth shareholders.”
Blackwells said it believes that a special committee, excluding Landy family, family affiliates and those directors affiliated with UMH Properties Inc., should be formed to objectively review the new Blackwells offer.
“The Monmouth Board of Directors, consistent with its fiduciary duties and in consultation with its financial and legal advisors, will carefully review and consider the revised proposal at its next meeting,” the company said in a press release. “The board and management team are confident in Monmouth’s business plan and are excited about the company’s prospects for continued growth and value creation in 2021 and beyond.”
Venable LLP is serving as Monmouth’s legal counsel, and CS Capital Advisors is acting as the company’s financial advisor.
On December 24, Monmouth announced the acquisition of a 657,518-square-foot industrial building at 3150 Highway 42 in Locust Grove, Georgia, for of $96.7 million. The property is net-leased for 20 years to Home Depot.
