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Investing.com -- Whitestone REIT (NYSE:WSR) stock surged 9.5% in premarket trading Tuesday after MCB Real Estate, its largest actively managed shareholder, announced a proposal to acquire the company for $15.20 per share in cash.
The all-cash offer represents a 21% premium to Whitestone’s closing share price and a 25% premium to its 30-day volume-weighted average price as of November 3. MCB, which owns 9.2% of Whitestone’s common shares, stated the proposal is backed by fully committed equity and debt financing supported by Wells Fargo.
In an open letter to shareholders, MCB criticized Whitestone’s performance, noting the company has delivered negative total shareholder returns of approximately 6.6% since rejecting MCB’s previous $15 per share offer in October 2024.
MCB highlighted Whitestone’s valuation discount compared to peers, pointing out that the company trades at an 11.6x next twelve months funds from operations (NTM FFO) multiple versus the peer average of 13.1x, and at an implied cap rate of 8.9% compared to the peer average of 7.1%.
The real estate investment firm also criticized Whitestone’s operational performance, stating its same-store NOI growth guidance of 4.0% for fiscal year 2025 trails the peer average of 4.2%, while its FFO per share growth rate of 4.0% falls below the peer average of 5.5%.
MCB urged Whitestone’s board to engage in negotiations or initiate a public strategic alternatives process, warning that it intends to vote against the entire board at the next annual meeting if no action is taken.