UNLOCK THE POWER OF THE VAULT

Hospitality Investors Trust Board Counters MacKenzie Tender Offer

October 26, 2017

Hospitality Investors Trust Board Counters MacKenzie Tender Offer

October 26, 2017 | James Sprow | Blue Vault

Euro coins. Euro money. Euro currency.Coins stacked on each othe

Hospitality Investors Trust Inc.’s board is calling on the company’s shareholders to reject MacKenzie Realty Capital Inc.’s unsolicited mini-tender offer for the company’s common shares and countering the offer by MacKenzie with a tender offer for up to 1,000,000 shares at a higher price.

MacKenzie is offering to buy up to 300,000 shares of the company’s outstanding common stock at $5.53 per share in cash. The expiration date of the MacKenzie offer is December 8.

On October 25, the company launched a self-tender offer, which will expire at 5 p.m. ET on December 11, for up to 1,000,000 shares at $6.50 per share. Stockholders may indicate to the Company via a “Conditional Tender” if they require a minimum number of shares to be purchased by the Company pursuant to the tender offer, and if the minimum number is not to be purchased, the shareholder can opt out of the tender offer. If more than 1,000,000 shares are tendered, the Company will purchase all shares properly tendered and not withdrawn on a pro rata basis, except those shares that are tendered conditionally.for which the condition is not satisfied.

The company’s board argued, among other things, that MacKenzie’s per-share offer price and the self-tender offer price are well below the current and potential long-term value of the shares. The trust also said it is making the self-tender offer only to prevent MacKenzie and other potential future bidders from exploiting the illiquidity of the shares. “If not for the MacKenzie offer, the Company would not be making the Company Offer” according to the Company’s letter to stockholders on October 25.

On July 1, 2016, the Company’s board of directors approved an initial estimated net asset value per share of common stock equal to $21.48 based on an estimated fair value of the Company’s assets less the estimated fair value of its liabilities, divided by 36,636,016 shares of common stock outstanding on a fully diluted basis as of March 31, 2016. On June 19, 2017, the Company’s board of directors approved an updated estimated per-share NAV equal to $13.20 based on an estimated fair value of the Company’s assets less the estimated fair value of the Company’s liabilities, divided by 39,617,676 shares of common stock outstanding on a fully diluted basis as of March 31, 2017.

Print Friendly, PDF & Email
Go Back
Gil Armour, CFP
February 3, 2016

I have been using Blue Vault Partners for the past five years.  I have found them to be a valuable, unbiased resource when it comes to evaluating and comparing non-traded REITs.  The reports help me analyze which sponsors are doing a responsible job of managing their offerings.  This allows me to limit my REIT recommendations to only the most competitive products, and then track those REITs throughout their life cycle.