The REIT confirmed last Friday that one of its biggest preferred stockholders, Westbrook Partners, has notified the company that Westbrook is exercising its "change of control preference" right—a move that could force Burnham Pacific to stop paying common share dividends until it buys out the stockholder.
The announcement was the latest in a series of hits to the company, which has seen its stock price erode steadily in recent months. The REIT is looking for a suitor, weighing the sale of assets and considering other moves to stop the decline.
The battle with the preferred stockholders comes as a group lead by Ohio-based real estate investor Jay Schottenstein is stepping up its effort to take control of Burnham Pacific's board and replace management. Schottenstein offered to buy the company for $13.50 a share last summer, but the board said the price was too low.
Burnham Pacific's stock closed at 5 9/16 Friday, down 5/16 from the previous day and less than half its 52-week high of nearly $13 last August.
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