KBS REIT Approves Estimated Value Per Share of $2.475 Amidst Liquidation
March 28, 2017 | by James Sprow | Blue Vault
On March 27, 2017, the KBS Real Estate Investment Trust, Inc. (the “Company”) board of directors approved an estimated value per share of the Company’s common stock of $2.475 (the “EVPS”), effective March 21, 2017. The Company is providing the EVPS to assist broker dealers that participated in the Company’s initial public offering in meeting their customer account statement reporting obligations under National Association of Securities Dealers Conduct Rule 2340 as required by the Financial Industry Regulatory Authority (“FINRA”). As described further below, the EVPS is equal to the midpoint of the estimated range of liquidating distributions of $3.27 and $3.68 per share (which midpoint is $3.475), reduced for the impact of the payment of the initial liquidating distribution to the Company’s stockholders of $1.00 per share on March 24, 2017. Thus, the EVPS reflects the resulting reduction of the stockholders’ remaining investment in the Company. This valuation was performed in accordance with the provisions of and also to comply with Practice Guideline 2013-01, Valuations of Publicly Registered, Non-Listed REITs, issued by the Investment Program Association (“IPA”) in April 2013 (the “IPA Valuation Guidelines”), reduced for the impact of liquidation fees and selling costs.
On January 27, 2017, the stockholders of KBS Real Estate Investment Trust, Inc. approved a plan of complete liquidation and dissolution of the Company (the “Plan of Liquidation”). The principal purpose of the Plan of Liquidation is to maximize stockholder value by selling the Company’s assets, paying its debts and distributing the net proceeds from liquidation to the Company’s stockholders. For a detailed description of the Plan of Liquidation, see the Company’s Definitive Proxy Statement, filed with the SEC on November 10, 2016 (the “Proxy Statement”). As disclosed in the Proxy Statement and as described further below, the Company estimated that, if the Company is able to successfully implement the Plan of Liquidation, the amount of cash that its stockholders would receive for each share of the Company’s common stock that they then hold could range between approximately $3.27 and $3.68 per share.
Pursuant to the Plan of Liquidation, on March 10, 2017, the Company’s board of directors authorized an initial liquidating distribution in the amount of $1.00 per share of common stock to the Company’s stockholders of record as of the close of business on March 21, 2017. The initial liquidating distribution was paid on March 24, 2017 and was funded from proceeds from asset sales. Since it is a liquidating distribution pursuant to the Plan of Liquidation, the initial liquidating distribution reduced the Company’s stockholders’ remaining investment in the Company and reduced the estimated range of future liquidating distributions per share to be received by the Company’s stockholders by $1.00 per share.
The Company is in the process of liquidating its remaining assets and expects to make one or more additional liquidating distributions pursuant to the Plan of Liquidation. There can be no assurances as to the timing or amount of any additional liquidating distributions.
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