Blackwells Capital has made an unsolicited proposal to acquire the portion of Monmouth Real Estate Investment Corp. that it doesn’t already own in a transaction valued at about $3.8 billion, including debt, Bloomberg News reported. The all-cash offer at $18 a share was made Friday, and is the second time Blackwells has proposed acquiring the remaining interest in the industrial real estate investment trust. The offer price is a 6% premium to Monmouth’s closing share price on Friday, and about a 22 percent premium to the price on Dec. 1 when Blackwells made the previous offer, which was rebuffed. New York-based Blackwells has called on Monmouth’s board to create a special committee to review the proposal that excludes affiliates and members of the company’s founding Landy family, the people said. It has asked that the company engage in exclusive bilateral talks with Blackwells followed by a go-shop period if a deal can be reached, they said. Blackwells, which owns less than a 5 percent stake in Monmouth, believes the company is undervalued and has underperformed its peers. Blackwells believes there are several reasons for Monmouth’s underperformance, including its poor capital allocation and weak corporate governance, and could more effectively make the changes it needs as a private company. Chief among those concerns is the expensive financing it has taken on to fund its expansion over the years, and the company’s portfolio of securities in other REITs that have been a drag on earnings. Monmouth said last month that it had more than $10 million in unrealized losses on its securities portfolio during its fiscal fourth quarter. At the end of September, those investments included CBL & Associates Properties, which filed for bankruptcy protection in November, according to regulatory filings.
