Hines REIT Recommends Shareholders Reject MacKenzie Pre-Liquidation Tender Offer
Hines Real Estate Investment Trust Inc., a publicly registered non-traded REIT, sent a letter to its shareholders recommending they reject a recent unsolicited tender offer by MacKenzie Capital Management, a non-traded business development company.
MacKenzie is offering to buy up to 1.5 million shares of the REIT’s common stock, or approximately 0.68 percent of the outstanding shares, for $4.50 each.
In the letter to shareholders, Hines REIT said that its board reviewed MacKenzie’s offer and noted that shareholders may not be able to realize the full value of their shares if they sell now.
Earlier this month, the Hines REIT board of directors unanimously approved a plan of liquidation and estimates that shareholders would receive distributions of $6.35 to $6.65 per share of common stock if the plan is executed.
The liquidation plan, which is subject to stockholder approval, includes Hines REIT entering into a definitive agreement to sell seven West Coast office assets in a cash transaction for approximately $1.2 billion to an affiliate of Blackstone Real Estate Partners VIII.
Additionally, Hines REIT is currently in the process of selling its interests in and liquidating the remaining assets that comprise its portfolio, including Chase Tower in Dallas, 321 North Clark in Chicago and a grocery-anchored retail portfolio located primarily in the southeastern United States.
Hines REIT previously distributed $1.01 per share from July 2011 through April 2013 which was designated as partial return of invested capital. Shares were originally priced between $10.00 and $10.40 each, with a final offering price of $10.08.
Hines previously announced that it will stop paying regular quarterly distributions after the second quarter of 2016 and expects to make final distributions to its stockholders on or before December 31, 2016.
Hines REIT, which invests in commercial real estate with a focus on multifamily properties, went effective in June 2004 and raised $2.3 billion in investor equity prior to closing its offering. In total, the company has acquired interests in 66 properties since its inception and has sold its interests in 42 of those properties, as of June 30, 2016.
