Monmouth Real Estate: We’ll sell to Zell, not Sternlicht

Starwood recently made an unsolicited all-cash bid

Illustration of Sam Zell of Equity Commonwealth (right) and Barry Sternlicht of Starwood (Illustration by Kevin Rebong for The Real Deal)
Sam Zell of Equity Commonwealth (right) appears to have won a tug-of-war with Barry Sternlicht of Starwood (Illustration by Kevin Rebong for The Real Deal)

Monmouth Real Estate made its choice Thursday, choosing to stick with an acquisition offer from Sam Zell rather than a last-minute bid from Barry Sternlicht.

The Holmdel, New Jersey–based firm announced Thursday it is going with the takeover bid from Zell’s Equity Commonwealth, according to Bloomberg News. The two sides agreed in May to an all-stock deal valued around $2.7 billion.

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Earlier this month, Sterlicht’s Starwood made an unsolicited takeover bid for Monmouth. Starwood later revised its bid, which is ultimately valued around $2.8 billion. Starwood claimed to have the superior bid, but Monmouth believes the upside of Equity Commonwealth’s is greater.

Monmouth shares slipped Thursday, falling 1.2 percent to close at $18.88.

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Monmouth Real Estate CEO Mike Landy (BMO)

Monmouth Real Estate CEO Mike Landy (BMO)

Zell’s firm stands to hold around 65 percent of the combined company. The acquisition would add around 120 industrial properties to his portfolio, spanning 31 states. Monmouth’s board said his offer “represents the best opportunity to maximize value for Monmouth stockholders,” according to a statement reported by Bloomberg.

While Starwood and Sternlicht appear to have lost the battle, the war might not be over yet. In a statement, Starwood expressed disappointment, saying Monmouth’s decision was not in the best interest of its shareholders. Starwood also said it remains ready to make a deal, should Monmouth change its mind.

[Bloomberg News] — Holden Walter-Warner