NorthStar Real Estate Income Trust Inc., a publicly registered non-traded REIT, sent a letter to shareholders recommending that they reject an unsolicited tender offer from MacKenzie Capital Management which is seeking to purchase up to 2.5 million shares of the REIT for $5.86 each. The offer expires on January 8, 2018.
NorthStar Income’s most recent estimated net asset value per share is $9.92 as of December 31, 2016, which was determined by the board in April 2017. The board said that the offer “is an opportunistic attempt to purchase shares at a discounted price.”
The REIT’s sponsor, Colony NorthStar Inc. (NYSE: CLNS), recently announced plans to merge with NorthStar Real Estate Income Trust and affiliated non-traded REIT NorthStar Real Estate Income Trust II.
If approved by shareholders, the merger would create a commercial real estate credit REIT named Colony NorthStar Credit Real Estate with approximately $5.5 billion in assets and $3.4 billion in equity value. The transaction is expected to close either in late 2017 or the first quarter of 2018. MacKenzie said that it plans to vote any shares it owns in favor of the merger.
NorthStar Real Estate Income Trust invests in real estate debt, select equity and securities investments predominantly in the United States. The offering was declared effective by the SEC in July 2010 and closed in July 2013 after raising more than $1.1 billion. As of the second quarter 2017, the company’s portfolio was comprised of 15 investments totaling nearly $2.2 billion.