EREZ ASSET MANAGEMENT SENDS LETTER TO WHITESTONE SHAREHOLDERS QUESTIONING RECENT CONDUCT OF WHITESTONE REIT BOARD
Whitestone Seeks to Distract Shareholders from its Board and Management's Many Failings and Scandals by Promoting a False Narrative About Erez's Intentions
Urgent Change is Desperately Needed at Whitestone, with New Trustees that
Encourages Whitestone Shareholders to Vote "FOR"
The full text of the letter is below:
Dear Fellow Whitestone REIT Shareholders,
Ask yourselves:
Why is Whitestone's
Whitestone is squandering significant capital to keep our nominees off the Board, thereby increasing G&A, when these monies could be better invested in growing the value of the Company. Why is the Company doing something that so clearly is not in the best interest of shareholders?
The reason: Whitestone's Board is entrenched, insular, and does not have the best interests of shareholders as its highest value.
In our communications with you, we have raised serious, urgent concerns about Whitestone's poor capital allocation, corporate management, and governance practices that we believe can be most effectively addressed with the input of new trustees with subject matter expertise. Specifically, we have outlined in detail how Whitestone's current Board is responsible for:
1) Major governance and disclosure failures that have deprived shareholders of a truly independent Board and have disenfranchised shareholders;
2) Unfathomable capital allocation decisions, such as below-NAV equity offerings that were immediately followed by distributions of the just-raised capital back to shareholders as dividends, that continue to destroy hundreds of millions of dollars in shareholder value; and
3) Poor corporate management and weak oversight of management resulting in both short-term and long-term guidance misses, creating a crisis of confidence in Whitestone among the REIT investment community and the capital markets.
These are the reasons that Whitestone continues to trade at the largest discount to net asset value (NAV) and at the lowest earnings multiple of any of the shopping center REITs it cites as its peers.
Yet rather than address these failings, the Whitestone Board continues to distract shareholders by promoting a false and irrelevant narrative: that Erez solely wants Whitestone to be sold and, more recently, that Erez secretly intends to buy Whitestone.
Let's address the latter point first: Erez has no secret plan to acquire Whitestone. To be clear, Erez is not capitalized to buy Whitestone, is not seeking to raise capital to acquire Whitestone, and has no intention of acquiring Whitestone. The Whitestone Board has disingenuously pointed to an outdated presentation of a strategy that Erez never pursued as evidence of "deception." There is simply none to be found.
As for whether Erez wants Whitestone to be sold, while any responsible board should be open to a value maximizing sale, we have repeatedly articulated our plans for Whitestone. As trustees, we would seek to:
1) Improve corporate governance in order to improve board independence and accountability;
2) Improve capital allocation decision making in order to avoid further value destruction; and
3) Improve management oversight in order to provide more reliable guidance and deliver more consistent performance.
These near-term confidence-rebuilding priorities are important, as
It is important to appreciate that practically nothing has changed at Whitestone with the departure of
1) Value destructive capital allocation; and
2) Poor corporate management – specifically related to missing guidance and providing inaccurate projections to the Board and the street.
These issues fell within the domain of Whitestone's then-CFO,
We are deeply disheartened by the recent conduct of the Whitestone Board, which is concocting stories that are observably false and otherwise irrelevant for the sole purpose of keeping two qualified executives out of their boardroom and breaking up their insular culture.
The behavior of the Board over the last few days has only made it clearer to us, and hopefully to all of you, that change is urgently needed at Whitestone. Trustees who are truly independent, and who bring much-needed subject-matter expertise, must be added to the Board to better oversee management and serve the interests of Whitestone's shareholders.
We respectfully ask that you support our two nominees for the Whitestone Board –
Sincerely,
Chairman, Erez Asset Management
To ensure the election of
If you have any questions or require assistance in voting your BLUE universal proxy card, please contact our proxy solicitor, Innisfree M&A Incorporated at: Shareholders may call toll-free: (877) 456-3422 Banks and brokers call: (212) 750-5833 |
About Erez Asset Management, LLC
Erez Asset Management, LLC is an investment management firm focused on undervalued small market cap REITs. Erez was founded in 2022 by Bruce Schanzer, former CEO of Cedar Realty Trust, a shopping center REIT, after the successful monetization of Cedar. Erez seeks to acquire meaningful stakes in REITs in which it believes it can work collaboratively with the management team and the board to help catalyze improved performance and share price appreciation by pursuing operational initiatives and strategic alternatives intended to benefit all stakeholders.
Contacts
Media:
Mark Semer / Iain Hughes
(212) 257-4170
erez@gasthalter.com
Investors:
Jonathan Salzberger / Scott Winter
212-750-5833
Disclaimer
This material does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein in any state to any person. In addition, the discussions and opinions in this press release and the material contained herein are for general information only, and are not intended to provide investment advice. All statements contained in this press release that are not clearly historical in nature or that necessarily depend on future events are "forward-looking statements," which are not guarantees of future performance or results, and the words "may," "might," "could," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of these terms and other comparable terminology are generally intended to identify forward-looking statements. Any such forward-looking statements contained herein are based on current assumptions, estimates and expectations, but are subject to a number of known and unknown risks and significant business, economic and competitive uncertainties that may cause actual results to differ materially from expectations. Any forward-looking statements should be considered in light of those risk factors. The Participants (as defined below) caution readers not to rely on any such forward-looking statements, which speak only as of the date they are made. Certain information included in this press release is based on data obtained from sources considered to be reliable. No representation is made with respect to the accuracy or completeness of such data, and any analyses provided to assist the recipient of this press release in evaluating the matters described herein may be based on subjective assessments and assumptions and may use one among alternative methodologies that produce different results. Accordingly, any analyses should also not be viewed as factual and also should not be relied upon as an accurate prediction of future results. Any figures are unaudited estimates and subject to revision without notice. The Participants disclaim any intent or obligation to publicly update or revise any such forward-looking statements to reflect any change in expectations or future events, conditions or circumstances on which any such forward-looking statements may be based, or that may affect the likelihood that actual results may differ from those set forth in such forward-looking statements.
Certain Information Concerning the Participants
The definitive proxy statement and an accompanying BLUE proxy card has been furnished to some or all of the Company's shareholders and are, along with other relevant documents, publicly available at no charge on the
View original content:https://www.prnewswire.com/news-releases/erez-asset-management-sends-letter-to-whitestone-shareholders-questioning-recent-conduct-of-whitestone-reit-board-302139015.html
SOURCE