CIM Group has received an offer from tech entrepreneur Daniel Negari to buy its publicly traded Creative Media & Community Trust subsidiary.
Negari, who founded internet domain name XYZ.com, offered to buy CMCT for $8.88 per share last month, according to a Securities & Exchange Commission filing on Monday. Given CMCT has 22.75 million outstanding shares, the offer is valued at about $201 million.
CIM Group, run by Shaul Kuba, Richard Ressler and Avi Shamesh, own 42.3 percent of CMCT, according to an investor presentation released this month.
On May 3, CMCT’s board rejected the offer, saying it “substantially undervalues” the firm, according to the filing. The board added Negari’s offer was “not credible” given he has not scored financing for the deal.
CMCT’s stock dropped about 7 percent after the SEC filing was released on Monday, closing at $4.15 per share.
The real estate investment trust that specializes in creative office properties owns about 1.3 million square feet of office space across Austin, San Francisco, L.A. and Oakland, plus a further 696 multifamily units in the latter two cities, the presentation shows.
The firm’s largest building in L.A. is 11620 Wilshire Boulevard — a 197,000-square-foot office complex that was 78 percent leased at the beginning of this month.
In the first quarter, CMCT reported a net loss of $12.7 million, an increase from the $8.9 million net loss the prior period and the $2.8 million net loss in the first quarter of last year, according to a financial filing.
CMCT also reported it held about $958 million in assets in the first quarter, up from $690 million in the fourth quarter.