Monmouth Shareholders Say No to $3.4B Merger With EQC

The proposed acquisition of Monmouth Real Estate Investment Corp. is off, at least for now. Monmouth said Tuesday that its shareholders had declined to approve Equity Commonwealth’s $3.4 billion offer to buy the industrial REIT.

First announced in May, the scuttled merger plan would have resulted in new ownership for one of the oldest equity REITs, which has a 25 million-square-foot, 32-state portfolio comprising 122 properties.

Led by Sam Zell, Equity Commonwealth originally offered an all-stock deal, revamped last month to include a combination of cash and stock valued at $19 per share. After the modified offer, the total consideration remained at $3.4 billion, including the assumption of $857 million in mortgage debt, plus the $550 million repayment of Monmouth preferred stock, line of credit and term loan.

In a statement, Monmouth President & CEO Michael Landy expressed disappointment in the outcome of the vote. The company said that it was open to “all available options” to maximize shareholder value.

Monmouth has been the object of multiple suitors in the past year. Starwood Capital Group joined the competition with an unsolicited offer of $19.51 per share submitted on July 15. Monmouth’s board declined Starwood’s offer and recommended that shareholders approve the Equity Commonwealth bid.

That followed a $3.8 billion offer last December by Blackwells Capital, an alternative investment manager and major Monmouth stockholder. The Monmouth board also turned down that proposal.

Stay tuned to CPE for updates on this developing story.