REIT Veris 'Welcomes Constructive Dialogue' With Kushner In Rejection
Veris Residential’s board knocked back another takeover bid from Kushner Cos., saying it wants a higher share price and more insight into the financing sources the company would use for the acquisition.
“We appreciate your continued interest in the Company, willingness to constructively engage, and revised proposals,” Veris’ board wrote in a letter to Kushner CEO Charles Kushner Monday, saying the $18.50-per-share offer would continue to undervalue the company.
In November, Kushner offered to acquire Veris at $16 per share, which would have put the REIT formerly known as Mack-Cali Realty Corp. at a value of roughly $4.3B, including debt. The board said at the time that the share price on the table would "grossly" undervalue Veris and that it didn't consider Kushner an “appropriate partner.”
But in the Monday letter, the board said it wants to continue in "serious, constructive, and direct negotiations” regarding an acquisition.
“We remind you that the Board has requested that any proposal, in addition to fully compensating shareholders for the intrinsic value of their shares, be supported by information regarding certainty of financing sources and further assurances from them that they are prepared to transact at the revised valuation," the letter reads.
Veris shares rose 3.7% in premarket trading after it rejected the offer. Veris said its board is willing to give Kushner a standard nondisclosure agreement in order to continue discussions.
“The Board notes that your latest two proposals, beyond undervaluing the Company, were not qualified given they lacked financing support at your revised valuations,” the board wrote. “Our advisors would welcome the opportunity to speak with your financial and legal advisors and financing partner.”
In correspondence with Kushner in November, Veris said the company, previously led by former President Donald Trump's son-in-law Jared Kushner, couldn't “substantiate” its capital, casting doubt over whether it would be able to close on a deal.
It added that Kushner lacks “third-party management” experience and has a history of “questionable management practices.”
Late last month, the Wall Street Journal reported that Fortress Investment Group has agreed to help finance Kushner’s bid.
Kushner didn't respond to a request for comment, but the elder Kushner told Reuters in November his company is “fully capitalized and committed” and added the Veris “leadership team has no clear long-term plan to maximize the value of the portfolio, nor are they the right team to execute.”
A takeover would add about 7,700 apartments to Kushner's 21,000-unit portfolio. Kushner already owns 5% of Veris’ shares.