Monmouth Gets Counteroffer to EQC Acquisition

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Monmouth Real Estate Investment has received an unsolicited acquisition bid from a large private equity firm. The proposal calls for the 100 percent acquisition of the industrial REIT’s outstanding equity for $19.51 per share. Bloomberg reported the bid came from Starwood Capital Group.

The proposal comes barely three months after Sam Zell’s Equity Commonwealth agreed to purchase Monmouth in a blockbuster $3.4 billion deal set to close in the second half of 2021. The new proposal’s consideration would be reduced by $62.2 million to cover the termination of the previously arranged merger, which, combined with an announced share dividend of $0.18 payable in September, brings the proposed acquisition price to a net of $18.70 per share.

The proposition included commitment letters from a major global bank to cover debt financing and provide an equity bridge, with the bidder noting the deal had been approved following earlier due diligence.

The REIT’s board of directors has stated that, while it has yet to respond to the offer, it will evaluate the proposal in light of the company’s and its shareholders’ interests. J.P. Morgan Securities and CS Capital Advisors are working as financial advisors, with Stroock & Stroock & Lavan providing legal counsel to Monmouth.

Starwood’s is only the latest in a series of proposals made to Monmouth. In December, Blackwells Capital LLC made a $3.8 billion all-cash offer to buy the REIT. That bid, however, was rejected after a one-month review.

This is a developing story. Stay tuned for more updates.