Shareholders of Phillips Edison & Company Inc., an internally managed real estate investment trust focused on grocery-anchored shopping centers, will soon vote on a charter amendment proposal that would facilitate a potential listing of the company’s common stock on a national securities exchange, and/or a concurrent registered public offering, in order to provide liquidity for shareholders. The company’s annual meeting is schedule on June 18, 2021 at 10:00 a.m. EST.
The charter amendment proposal would allow the company to implement a plan for phased-in liquidity in connection with an exchange listing and a potential concurrent registered public offering of common stock, which is intended to stabilize public stock prices by having its outstanding common stock enter into the public market at a later date.
The amendment would allow the REIT to change each share of outstanding common stock into one share of newly created Class B common stock, which would automatically convert into listed shares within six months of the company listing its common stock on a national exchange.
If the company were to list its existing common stock without the phased-in liquidity, all of those shares would be immediately put up for sale in the public market, likely resulting in large and concentrated sales in a brief period of time. This would likely reduce the trading price, and may negatively impact the price that investors would be willing to pay in a concurrent registered public offering, the company said. The proposed amendment would allow the REIT to implement a plan for phased-in liquidity that would reduce the likelihood that these concentrated sales would occur.
“Since November of 2020, we have seen a dramatic improvement in the sentiment and appetite for retail shopping center REITs in the public markets. Investors are positioning to capitalize on the economy as it re-opens, vaccines are distributed, and consumer buying power is buoyed by government stimulus,” Phillips Edison & Company said in a proxy statement. “We are looking for opportunities to allow us to capitalize on this current momentum, including potentially listing our securities on a national stock exchange or potentially listing in conjunction with a substantially concurrent registered public offering.”
Late last month, the REIT suspended its dividend reinvestment plan and share repurchase program in order for its board and management to evaluate liquidity alternatives, although few specifics were disclosed at that time.
Phillips Edison’s most recent net asset value per share was $8.75 as of March 31, 2020, compared to the prior year’s NAV per share of $11.10.
Phillips Edison & Company Inc. (formerly known as Phillips Edison Grocery Center REIT I Inc.) is one of the nation’s largest owners and operators of grocery-anchored shopping centers and oversees a portfolio of 308 properties. The company’s offering was declared effective by the SEC in August 2010 and raised approximately $1.8 billion in investor equity before closing in February 2014.