Monmouth Shareholders Reject Takeover Offer From Zell's Equity Commonwealth
Equity Commonwealth's bid to acquire industrial owner Monmouth Real Estate Investment Corp. has been rejected.
Monmouth stockholders voted against the proposal at a special meeting, Monmouth announced on Tuesday. Monmouth executives said in a press release they plan to continue to pursue paths to be acquired.
"While we recognize that stockholders have a wide range of views and differing time-horizons and tax considerations, we are disappointed in the outcome of today’s vote," Monmouth CEO Michael Landy said in a statement. "We continue to believe in the merits of a transaction that offers Monmouth stockholders the opportunity to continue to participate in the growth of the industrial real estate sector.”
The move came despite the fact that Sam Zell's company sweetened its bid for Monmouth two weeks prior, proposing a cash option that would pay Monmouth shareholders $19 per share instead of receiving 0.713 shares of EQC stock. The offer valued Monmouth at roughly $3.4B and would have created an entity worth about $5.5B.
Chicago-based Equity Commonwealth said in a press release Tuesday afternoon that it has terminated the agreement with New Jersey-based Monmouth, and it plans to pursue reimbursement for the expenses and fees associated with the failed transaction.
“While we are disappointed with the results of Monmouth’s shareholder vote, we are proud of the efforts of the EQC team throughout the process,” Equity Commonwealth CEO David Helfand said in a statement.
Independent advisory firm Institutional Shareholder Services recommended that Monmouth shareholders vote against Equity Commonwealth's initial offer. The firm cited the increased certainty of a competing offer, along with Equity Commonwealth's lack of track record in the industrial sector.
Starwood Capital Group was the other major bidder for Monmouth. It too raised its bid over the summer.
Monmouth's largely industrial portfolio consists of 122 properties representing a total of about 24.9M SF in 32 states. The portfolio's occupancy rate is 99.7%. The REIT's stock was up slightly in trading Tuesday after it announced the result of the vote.