KBS REIT III Encourages Shareholders to Reject Mini Tender Offer

The board of KBS Real Estate Investment Trust III Inc., a publicly registered non-traded real estate investment trust, sent a letter to their shareholders recommending that they reject unsolicited mini-tender offers from CMG Income Fund II LLC, CMG Liquidity Fund LLC, Blue River Capital LLC and CMG Partners LLC.

There is no current expiration date on the offer.

CMG is offering to purchase up to 450,000 shares, equal to 0.30% of the company’s outstanding common stock, for $4.02 each.

The offer is a 55% discount to KBS REIT III’s Sept. 28, 2022 estimated value per share, which was $9.00.

KBS says CMG discloses in their offering letter that they may choose to resell some or all of the shares they receive in their offer to another party and in their offering documents they disclose that CMG recently sold 15,000 shares of KBS REIT III’s common stock and purchased 501.54 shares at prices of $6.59 and $5.05 per share in secondary market transactions, which is above their offer price of $4.02 per share.

KBS claims that this tender offer indicates that they believe the shares are worth far more than their offering price since CMG currently owns 24,503 shares and is offering to acquire 450,000 additional shares through.

Shares most recently traded on LODAS Markets, previously known as Realto, for $7.00 each.

As The DI Wire previously reported, KBS Real Estate Investment Trust III Inc.’s board of directors recently announced a reduction in distributions and the suspension of ordinary redemptions.

KBS REIT III’s initial offering commenced in October 2010 and closed in July 2015 after raising approximately $1.7 billion. As of May 2022, the REIT’s portfolio was comprised of 17 properties with an estimated value of $3 billion, based on September 2021 appraisals.

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