SANTA ANA, CA-Grubb & Ellis Co. says it has "received initial indications of interest from numerous strategic and financial buyers" after it hired JMP Securities in March to explore a possible sale or merger of the company, or other strategic moves. The company, which hired JMP after receiving unsolicited inquiries, also says it expects to complete a transaction with respect to its Daymark Realty Advisors tenant-in-common subsidiary, which Grubb spun off as a subsidiary earlier this year.
Among those interested in Grubb & Ellis, Santa Monica, CA-based Colony Capital LLC invested $18 million in Grubb & Ellis and signed a 60-day exclusivity period to explore a larger strategic transaction. As of May 29, Colony’s exclusivity period ended, "which allows Grubb & Ellis to actively engage in discussions with additional parties, while continuing discussions with Colony," Grubb & Ellis said Tuesday in an announcement.
Thomas P. D’Arcy, president and CEO of Grubb & Ellis, said in the announcement: "We have already made significant progress with both initiatives, and now that we have expanded the pool of potential strategic partners, the board and management are intent on bringing the strategic process to conclusion in a manner that creates value for all of our stakeholders." Daymark, D'Arcy said, "has attracted strong interest from a range of potential buyers."
Daymark is responsible for the management of the company’s tenant-in-common portfolio, which consists of 30 million square feet of commercial real estate, including 8,700 apartment units and nearly 5,000 investors.
During the time it has been evaluating strategic alternatives, Grubb & Ellis has received two notices from the New York Stock exchange regarding possible delisting. The first, as reported by GlobeSt.com, said that the company was not in compliance with NYSE regulations that require a minimum average closing price of $1 per share over 30 consecutive trading days.
The second delisting notice, received May 19, 2011, said that the Santa Ana-based company was not in compliance with NYSE listing standards that require an average market capitalization of not less than $50 million over 30 consecutive trading days and shareholders' equity of not less than $50 million. "The company intends to notify the NYSE that it will submit a plan within 45 days from the receipt of the NYSE notice that demonstrates its ability to regain compliance within 18 months," Grubb & Ellis said.
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