Regency Center Corp. announced three weeks ago that it offered to acquire AmREIT Inc. for $22 per share. The unsolicited acquisition proposal represented a 20 percent premium, based on the average closing price of AmREIT’s common stock over the last 30 days, and also exceeds AmREIT’s all-time-high stock price by more than $2 a share.
According to Regency’s official statement, the offer represents a solution to AmREIT’s difficulties in accessing capital due to its smaller size in contrast to other public REITs. AmREIT will also benefit by being able to grow same-property NOI and by accessing a stronger balance sheet that offers readily available capital for growth, Regency declared.
“We believe that there is a strong strategic, financial and operational rationale for the combination of Regency and AmREIT. We are confident that this transaction is in the best interests of both companies’ shareholders and have a great interest in moving forward toward the negotiation of final terms and documentation. Importantly, we are willing to offer either cash or stock consideration, or a combination of the two, such that AmREIT shareholders could receive immediate and certain value for their shares and/or the opportunity to participate in the combined company’s upside potential,” said Hap Stein, Regency’s chairman & CEO.
On the 29th of July, AmREIT officially refused the acquisition proposal, announcing that its board of directors plans to seek out alternative strategies to improve stockholder value. In order to assure a fair assessment of alternatives, the board decided to make the company subject to the Maryland Business Combination Act, which prohibits certain mergers between the company and potential stockholders who own 10 percent or more of the voting power of AmREIT’s voting stock. With this measure, they ensure an orderly review of all the alternatives feasible for the company.
“Given the value of our unique assets, robust development pipeline and promising future prospects, supported by our top-of-class platform, our board believes that now is the right time to conduct a thorough review to determine how best to continue to enhance stockholder value, and we are taking appropriate action to ensure a thorough evaluation,” the company said.