Benzinga | Jul 12, 2021 04:47PM EDT

Monmouth Real Estate Investment Corp. Reports Receipt Of Unsolicited Acquisition Offer At $18.70/Share

Monmouth Real Estate Investment Corporation (NYSE:MNR), or Monmouth, today announced that it received an unsolicited acquisition proposal from a large private investment firm primarily focused on global real estate that participated in the strategic alternatives review process undertaken by Monmouth's Board of Directors earlier this year and made a proposal to acquire Monmouth as part of that process. Under the terms of its new proposal, the investment firm is proposing to acquire 100% of the outstanding equity of Monmouth for net cash consideration of approximately $18.70 per share of Monmouth Common Stock, reflecting a stated per share purchase price of $19.51 per share, reduced by (i) the termination fee payable by Monmouth to Equity Commonwealth, or EQC, of approximately $62.2 million, or $0.63 per share, if Monmouth terminates the merger agreement it previously entered into with EQC in accordance with its terms to accept the new proposal and (ii) the $0.18 per share dividend on Monmouth's common stock previously declared by Monmouth's Board of Directors on July 1, 2021 and payable on or about September 15, 2021. On July 12, 2021, Monmouth's common shares closed at $19.00 per share.

The new unsolicited proposal was accompanied by executed commitment letters from a global commercial bank with respect to the investment firm's contemplated debt financing and an equity bridge, as well as a proposed form of merger agreement. The new proposal states that the investment firm has obtained all necessary internal approvals and has completed its due diligence.

On May 4, 2021, Monmouth announced that it had entered into a definitive merger agreement with EQC, pursuant to which EQC agreed to acquire Monmouth in an all-stock transaction, valued at approximately $3.4 billion, including the assumption of debt. The combined company is expected to have a pro forma equity market capitalization of approximately $5.5 billion.

Consistent with its fiduciary duties and in consultation with its financial and legal advisors, Monmouth's Board of Directors is evaluating the new unsolicited proposal and has not made any determination as to what action to take in response to the proposal. Monmouth's Board of Directors intends to respond to the proposal in due course and remains committed to acting in the best interests of the Company and its shareholders.

J.P. Morgan Securities LLC and CS Capital Advisors, LLC are acting as financial advisors and Stroock & Stroock & Lavan LLP is serving as legal advisor to Monmouth.