Benzinga | Jul 28, 2021 07:20AM EDT

Starwood Capital Group Affiliate Files Preliminary Proxy Statement in Opposition to Monmouth Real Estate Investment Corp.'s Proposed Sale to Equity Commonwealth

Reaffirms Commitment to its Superior All-Cash Proposal

Stands Ready to Execute Fully Financed, Fully Actionable Offer That Would Provide Immediate Value to Monmouth Shareholders

Urges Monmouth Shareholders Demand the Opportunity to Vote on Starwood's Superior Proposal

Starwood Capital Group ("Starwood Capital"), a leading global private investment firm focused on real estate and energy investments, today announced that its affiliate Starwood Real Estate Income Trust, Inc. ("Starwood") has filed a preliminary proxy statement with the U.S. Securities and Exchange Commission urging shareholders of Monmouth Real Estate Investment Corp. (NYSE:MNR) ("Monmouth") to vote against the proposed sale of Monmouth to Equity Commonwealth ("EQC") at the upcoming special meeting of Monmouth shareholders scheduled for August 17, 2021 (the "Special Meeting"). The preliminary proxy statement is available here: https://www.sec.gov/Archives/edgar/data/67625/000119312521225930/d180189dprec14a.htm.

On July 15, 2021, Starwood submitted an all-cash, fully financed, fully actionable acquisition proposal to acquire Monmouth for net cash consideration of $18.88 per share. Starwood's proposal offers a 5.6% premium and approximately $100 million of additional value compared to the implied value of $17.88 per share of the EQC transaction, based on the closing price of EQC's common shares of $26.69 on July 27, 2021. However, Monmouth's Board of Directors has rejected this superior all-cash acquisition proposal, and continues to recommend that its shareholders accept a financially inferior transaction.

At the Special Meeting, Monmouth is asking its shareholders to approve the EQC transaction by a vote of two-thirds of the outstanding Monmouth shares. Only shareholders who hold Monmouth shares as of the close of business on August 2, 2021, the record date established by the Monmouth Board, will be entitled to vote at the Special Meeting.

The preliminary proxy statement outlines the background of Starwood's engagement with Monmouth and the reasons Starwood believes its July 15 proposal is superior to EQC's proposed transaction for a variety of reasons, including:

* Starwood's proposal clearly provides Monmouth shareholders with greater value and certainty than the EQC transaction.

* Starwood's proposal is fully financed and has no financing contingencies. All necessary financing commitments to fund the transaction have been executed and provided to the Monmouth Board.

* Starwood's price is fixed and shareholders can be certain of the value they will receive.

* Unlike the EQC transaction, which requires approval of EQC shareholders in addition to approval by Monmouth shareholders, Starwood's proposal does not require a vote of Starwood shareholders to move forward with the merger agreement and close the transaction.

* Starwood's proposal requires no further due diligence or approvals by Starwood.

* Starwood's proposal is fully and immediately actionable, as Starwood has already provided a merger agreement to Monmouth that Starwood is ready to sign immediately.

"We firmly believe that EQC's all-stock offer is not in the best interests of all of Monmouth's shareholders," said Ethan Bing, Managing Director at Starwood Capital. "Starwood Capital has proposed an all-cash alternative that would deliver significant additional value to Monmouth shareholders compared to EQC's offer along with certainty that value will be realized. We stand ready to sign a finalized merger agreement."

Bing added, "Monmouth's Board continues to recommend an inferior transaction that denies shareholders the ability to realize significant additional value. We believe Monmouth shareholders should protect their own best interests by voting against the EQC transaction and urge their Board to accept Starwood Capital's superior proposal and allow shareholders to vote on that proposal."

Starwood remains fully committed to its proposal and stands ready to execute its all-cash, fully financed, fully actionable offer, with the goal of working collaboratively with Monmouth to reach an agreement.