Hines Global REIT Inc., a publicly registered non-traded real estate investment trust, has sent a letter to shareholders urging that they reject an unsolicited tender offer from MacKenzie Realty Capital Inc, which seeks to buy up to 1 million shares of REIT common stock for $1.50 per share. The offer expires on May 22, 2020.
“Given the $1.50 per share offer price, we believe that the tender offer represents an attempt by the purchaser to exploit the current economic turmoil caused by the COVID-19 pandemic,” stated Hines Global in the shareholder letter.”
Hines Global REIT’s most recent net asset value per share was $6.17 as of February 14, 2019, and last month, the board decided not to calculate a new net asset value per share of the company’s common stock in light of the coronavirus (COVID-19) pandemic.
The company is in the process of selling its property portfolio after shareholders approved its liquidation and dissolution plan in July 2018. In April 2018, the REIT’s board estimated that total proceeds to investors would range from approximately $10.00 to $11.00 per share, in addition to regular operating distributions paid to stockholders. To date, shareholders have received approximately $4.00 per share of return of invested capital and liquidating distributions.
“In light of various risks and uncertainties, including those related to the COVID-19 pandemic, there can be no assurances as to the timing of future liquidating distributions or that the aggregate liquidating distributions ultimately paid to our stockholders will be within the range originally estimated by our board in April 2018,” the REIT said. “Nonetheless, we believe that liquidating distributions will be significantly higher than the $1.50 per share offered by [MacKenzie].
Hines Global REIT launched in December 2008 and closed its offering in April 2014 after raising $2.7 billion in investor equity. The company’s portfolio is comprised of 12 assets located in the U.S. and abroad.