Steadfast Apartment REIT Recommends Shareholders Reject CMG Tender Offer
CMG Partners and its affiliates have initiated an unsolicited tender offer to purchase up to 125,000 shares of Steadfast Apartment REIT Inc.
CMG Partners and its affiliates have initiated an unsolicited tender offer to purchase up to 125,000 shares of Steadfast Apartment REIT Inc., a publicly registered non-traded real estate investment trust, for $10.05 per share in cash.
Steadfast sent a letter to shareholders recommending that they reject CMG’s offer, based on the following:
Steadfast’s most recent net asset value per share of $15.55 as of December 31, 2020 is $5.50 higher than CMG’s offer price.
Last month, Steadfast announced its agreement to merge with publicly traded REIT, Independence Realty Trust Inc. (NYSE: IRT), and suspended its share repurchase program in connection with the proposed merger. Under the terms of the merger agreement, each share of Steadfast Apartment REIT will be converted into 0.905 shares of newly issued Independence Realty Trust common stock, including cash in lieu of fractional shares.
Based on IRT’s August 23, 2021 closing price of $20.00, each share of Steadfast common stock would be valued at $18.10, or $8.05 higher than CMG’s offer price.
“The CMG offer provides a means for stockholders to obtain liquidity with respect to their shares, albeit at a lower price than the estimated value, the estimated value of the merger consideration, or what the board believes to be the shares’ long-term value,” Steadfast stated in its letter to shareholders.
CMG’s tender offer expires on September 6, 2021, unless extended.
Steadfast Apartment REIT invests in apartment communities in targeted markets throughout the United States that have demonstrated high occupancy and income levels across market cycles. The REIT owns and/or manages a $3.4 billion portfolio of 70 apartment communities in 14 states. In March 2020, Steadfast Apartment REIT completed its mergers with affiliated non-traded REITs, Steadfast Income REIT Inc. and Steadfast Apartment REIT III Inc. The post-merger entity had a net asset value per share of $15.23, as of March 6, 2020.
