Kushner gets Fortress to fund hostile takeover of Veris

Target firm, formerly Mack-Cali, has rejected buyout offers

New York /
Nov.November 23, 2022 09:43 AM
From left: Kushner Companies’ Charles Kushner, Fortress Investment Group's Peter Briger, and Veris Residential’s Mahbod Nia (Getty, Fortress Investment Group, YouTube)

From left: Kushner Companies’ Charles Kushner, Fortress Investment Group’s Peter Briger, and Veris Residential’s Mahbod Nia (Getty, Fortress Investment Group, YouTube)

Charles Kushner put it best: “At least now the [Veris Residential] board no longer has the financing excuse.”

Fortress Investment Group agreed to help finance Kushner Companies’ unsolicited bid to take over Veris, the Wall Street Journal reported.

Fortress wrote to Veris last week that its affiliates were ready to finance the debt and equity of Kushner’s $16-per-share offer, which would value the real estate investment trust at $4.3 billion.

“We are fully aligned with Kushner on this transaction,” Fortress Credit Funds CIO Constantine Dakolias said in the letter.

Veris did not immediately comment on Fortress’ agreement with Kushner.

It’s the latest twist in a saga that has turned ugly as Kushner has wooed Veris, only to be spurned by the New Jersey-based firm formerly known as Mack-Cali. At the start of the month, Veris’ board unanimously rejected an unsolicited bid, claiming the offer “grossly” undervalued the REIT.

Veris’ board also claimed Kushner was “unable to substantiate its equity or debt financing sources.” The Fortress letter seemingly mitigates that concern, as Charles Kushner pointed out in a letter.

The chairman of the New Jersey-based company responded to his rejection by accusing the Veris board of being “uninformed at best and disingenuous at worst.”

Previously, he had trashed Veris’ leadership in a presentation to shareholders arguing they would be better off with his firm in charge. Kushner portrayed the Veris leaders as bumbling, saying they made poor decisions and misled shareholders.

If Kushner succeeds in its takeover attempt, it would add roughly 7,700 units to a 21,000-unit portfolio that spans 14 states. Kushner owns a nearly 5 percent stake in Veris.

Its bid came as Veris pivoted away from its New Jersey office portfolio. Last month, Veris reported that multifamily properties comprised 89 percent of its portfolio. That revelation came after a $766 million deal for Jersey City office properties and a $420 million deal for the Harborside complex. The latter was a source of dispute between Veris and Kushner.

— Holden Walter-Warner





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