Veris Residential rejected Kushner Companies’ unsolicited bid to acquire the New Jersey rental owner.
Veris announced the board’s unanimous rejection of Kushner’s offer on Thursday, nearly two weeks after Charles Kushner’s company proposed acquiring the real estate investment trust for $16 per share, valuing the firm at $4.3 billion.
Veris’ board claimed in a letter to Kushner the proposal “grossly” undervalued the REIT. Veris took another shot, claiming Kushner was “unable to substantiate its equity or debt financing sources.”
The board also fought back on Kushner’s claim that Veris ignored Kushner, mentioning previous exchanges between the two companies, including an alleged quid pro quo demand by Kushner for two board seats at Veris.
In rejecting Kushner’s management proposal, Veris pointed out underperformance of externally managed REITs versus internally managed ones. The board twisted the knife a bit further, however, saying Kushner has a “well-documented history of questionable management practices.”
When contacted for comment by The Real Deal, a spokesperson for Kushner cited a Nov. 3 letter signed by Charles to Veris’ board to refute its claims about the offer.
In the letter, which the chairman said he found “to be uninformed at best and disingenuous at worst,” Veris’ concerns about external management don’t account for the firm’s “bespoke proposal.”
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The merger’s chances looked fraught in the days after the offer, when Kushner trashed Veris’ leadership in a presentation to shareholders. Kushner portrayed Veris’ leaders as bumbling, accusing them of making poor decisions and misleading shareholders.
If the acquisition succeeded, Kushner stood to add roughly 7,700 units to a 21,000-unit portfolio spanning 14 states. The Wall Street Journal previously reported Kushner owns a 5 percent stake in Veris.
The REIT is pivoting away from its New Jersey office portfolio. Veris said last month that after deals including $766 million for Jersey City office properties and $420 million for the Harborside complex, multifamily properties comprise 89 percent of its portfolio.
Veris claims Kushner abruptly withdrew an offer for the Harborside complex in April. Kushner retorted that it made it clear to Veris’ board that it didn’t want Harborside, but wanted to acquire the whole company.