Starwood Boosts Offer for Monmouth in Bidding War With Zell

(Bloomberg) -- Starwood Capital Group has increased its bid for Monmouth Real Estate Investment Corp. to $19.20 a share in cash as it raises the stakes in a bidding war against Sam Zell’s Equity Commonwealth for the industrial real estate company. 

The improved bid from Starwood comes two days after Equity Commonwealth sweetened its own proposal to $19 a share in cash, or 0.713 shares of Equity Commonwealth for each Monmouth share currently held by investors on a prorated basis. Starwood added that it hadn’t increased the termination fee included in its original offer, unlike Equity Commonwealth, which raised it to $72 million from $62 million.

“Our increased all-cash offer is superior to EQC’s revised proposal given the higher certain value that is not exposed to market risk or dependent upon unproven execution,” Ethan Bing, Starwood managing director, said in a statement.

Monmouth’s shares were up less than 1% at $19.05 in early trading on Thursday.

Monmouth acknowledged that it had received Starwood’s new bid and said its board will respond to the proposal in “due course,” according to a statement Thursday.

The back and forth is the latest in a months-long battle for control of the industrial REIT. 

New Jersey-based Monmouth agreed to be acquired by Equity Commonwealth in May in an all-stock deal that would be currently valued at about $2.8 billion, including debt. Starwood previously submitted a competing all-cash bid of $18.88 a share that was rejected by Monmouth’s board. 

Investor Blackwells Capital, which had offered to acquire the company itself for $18 a share in December, said Tuesday it opposed the revised terms of the Equity Commonwealth offer, arguing that the company is worth $26 to $30 a share.  A representative for Blackwells wasn’t immediately available for comment. 

©2021 Bloomberg L.P.