Home / Business and Economy / Hedge Fund Emmett Prepares for Proxy Fight with Whitestone REIT
Hedge Fund Emmett Prepares for Proxy Fight with Whitestone REIT
21 Aug
Summary
- Emmett Investment Management, a New York-based hedge fund, plans to nominate directors to Whitestone REIT's board
- Emmett has expressed frustrations over Whitestone's capital allocation and governance
- Whitestone recently rejected a $15 per share takeover bid by MCB Real Estate
In a developing story, hedge fund Emmett Investment Management is preparing for a possible board room fight with Whitestone REIT, a Houston-based shopping center operator. Emmett, a New York-based investment firm run by Alexander Rohr, has been a long-term investor in Whitestone and has expressed frustrations over the company's capital allocation and governance.
As of the end of the second quarter, Emmett owned 2.2% of Whitestone, making it the sixth largest investor in the $633 million company. Emmett is now laying the groundwork for what would be its first proxy contest, where it would attempt to replace the majority of Whitestone's six-person board.
This would be Whitestone's second proxy battle in two years. Shortly after beating back a board challenge last year, the company's management rejected a $15 per share takeover bid by MCB Real Estate. Since then, Whitestone's share price has dropped by more than 14% to around $12.40 as of the latest trading session.
Emmett has privately expressed that Whitestone's future looks dim without meaningful changes, according to sources familiar with the matter. The hedge fund's campaign comes at a time when open-air shopping mall assets are in high demand, according to industry analysts.
