Sila Realty Trust Recommends Shareholders Reject Latest Unsolicited Tender Offer
Sila Realty Trust has sent a letter to shareholders recommending they reject an unsolicited tender offer by CMG Partners.
Sila Realty Trust Inc., a publicly registered, non-traded real estate investment trust formerly known as Carter Validus Mission Critical REIT II, has sent a letter to shareholders recommending they reject an unsolicited tender offer by CMG Partners and its affiliates, CMG Income Fund II LLC, CMG Liquidity Fund LLC and Blue River Capital LLC.
CMG is offering to purchase up to 500,000 Class A shares for $4.15 each, approximately 50 percent less than the REIT’s most recent net asset value per share of $8.20, announced in July 2021. CMG’s offer expires on April 13, 2022, unless extended.
In December 2020, the REIT amended its share repurchase program to limit redemptions to a shareholder’s death or involuntary exigent circumstances.
“We believe the CMG offer represents an attempt by CMG to catch current stockholders of the company off-guard and acquire the shares at a low price in order to make a profit and, as a result, deprive the stockholders that tender their shares of the company’s common stock of the full potential long-term value of the shares,” said Michael Seton, Sila’s chief executive officer and president.
CMG and its affiliates currently own 16,300 Class A shares, or 0.01 percent of the outstanding. The 500,000 shares in the current tender offer constitute 0.22 percent of the outstanding shares of all classes, and 0.30 percent of the Class A shares. CMG will pay roughly $2.1 million if all shares in the offer are tendered.
In July 22, 2021, the REIT sold its entire 29-property data center portfolio to subsidiaries of Mapletree Industrial Trust, a REIT listed on the Singapore Exchange, for more than $1.3 billion. Following the sale, stockholders received a $1.75 per share special cash distribution.
Sila Realty Trust invests in what it deems as “high-quality healthcare properties leased to tenants capitalizing on critical and structural economic growth drivers.” The REIT raised approximately $1.2 billion in investor equity after launching its initial offering in May 2014. Its follow-on offering closed in November 2018 and raised $129.3 million. Sila Realty Trust owned 125 healthcare properties, as of September 30, 2021.
