(For more retail coverage, click GlobeSt.com/RETAIL and the multifamily market, click here.)

KENNER, LA-Compson Holding Corp. of Boca Raton, FL has leveled another offer for Sizeler Property Investors Inc.’s portfolio–now that behind-the-scene details are available in an SEC filing. Compson’s offer, which expires 5 p.m. Thursday, boosts the ante to $16.10 per share for the 30-property package of retail and multifamily assets.

“They have a fiduciary obligation to entertain all offers, but based on their action to date and the action of their agent, I have no idea how they will treat this,” Michael Comparato, Compson’s president, tells GlobeSt.com.

Sizeler last Thursday filed its preliminary proxy detailing the sequence of events that led to the decision to sell the company to Toronto-based Revenue Properties Co. Ltd. and its majority owner, Morguard Corp.. In the SEC filing, Sizeler reported it declined to amend its charter April 18 to allow the Canadian companies, now the largest stockholder with 2.12 million shares, to exceed the ceiling and buy up to 19.9% of its stock in one or more privately negotiated deals. At that time, Sizeler’s chairman and third largest shareholder Michael Tanz was on the boards of Revenue Properties and Morguard, but he recused himself from the vote and resigned from both boards the next day to avoid possible conflicts of interest, according to the SEC filing. Also that day–April 19–Wachovia contacted 87 potential bidders, with 44 subsequently executing confidentiality agreements.

The SEC report says Wachovia returned May 22 to the Sizeler board with 10 proposals. Eight days later, Wachovia “advised that a number of second round bidders might not continue in the process.” The offers ranged from $12.37 per share to $15.75 per share. The final call was made June 22, with re-trading eventually producing a $15.10 per share offer from Revenue Properties.

The tell-all didn’t settle well with Comparato, one of the 10 first-round offers. “We did not make a second offer because we were discouraged by Wachovia to do so,” Comparato says. “Furthermore, the stipulations that Wachovia set for us were nothing short of absurd.”

Compson’s first offer was $15.50 per share as was at least one other bid. “The response from Wachovia was our offer was short on price and not acceptable due to the inclusion of a 14-day due diligence,” Comparato says. “In verbal negotiations with Wachovia, we agreed to increase our price to $16 per share, however required the 14-day due diligence.” He says the other stickling point was Compson didn’t want the entire company. “We were told to no longer pursue the transaction unless our offer was for the entire company, not solely the assets, and had no contingency period,” he says.

Comparato is sticking by an offer to buy the real estate, but not the Sizeler company. “We don’t buy companies,” he says. “We buy real estate. I don’t have an interest in taking on employees or potential liabilities that come when a company is bought.”

Under the pact with Revenue Properties-Morguard, Sizeler president and CEO Thomas A, Masilla Jr. and CFO Guy M. Cheramie will be retained on an at-will basis. If the merger closes Nov. 1, Masilla’s cash severance will be about $1.82 million and Cheramie’s $1.08 million. Besides his per-share take, Tanz also will get $165,000 in cash immediately prior to closing in lieu of 150,000 options for Sizeler common stock.

The proposed merger’s break-up cost is $6.5 million or all expenses incurred by Revenue Properties–whichever is cheaper. If Sizeler follows normal schedules, a final proxy will be filed by the end of September. It’s anticipated that a shareholders’ vote will be held in mid-October.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

 

GlobeSt Net Lease Spring 2024Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.