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KENNER, LA-Several large shareholders ofSizeler Property Investors Inc. are puzzled by the board chairman’s sudden exit, but aren’t convinced it will have any impact on the groundswell of opposition to a $324-million merger plan with Canadian-based Revenue Properties Co. Ltd. and Morguard Corp.

“Why would someone resign before a deal gets signed,” Phillip Goldstein, the Pleasantville, NY-based principal of Bulldog Investors, which has owns 1.4 million Sizeler shares, says to GlobeSt.com. “My best guess is there’s some dissension on the board. Based on my experience, when I see someone’s resigning for personal reasons, there’s always some dissension on the board.”

Sizeler president Thomas Masilla Jr. didn’t return a telephone call to comment on last Friday’s exit by Mark M. Tanz, who’s been the chief dealmaker in a repeat performance of selling a company and all that it owns to a Morguard-funded play. Four years ago, Tanz married Revenue Properties to Morguard, getting seats on both companies’ boards. He resigned those seats April 19 as Sizeler was going into play. Revenue Properties also is a 9.89% stakeholder in the Sizeler REIT.

Though the Sizeler camp is quiet on all fronts, some shareholders aren’t convinced that Tanz’s voluntary exit will have any impact the merger vote when they finally get a date and time to cast ballots. “This will, maybe, remove some of that issue, but I don’t think overall it will affect it. It only kind of glosses it over,” says Christine Simpson, chief investment officer for MacKenzie Patterson Fuller LP of Moraga, CA, a firm with 93,450 shares at stake.

Simpson, who’s been in talks with other shareholders, estimates about 25% of the eligible voters are poised to vote against the merger. At this stage, the vote is hard to call because there’s no way to know how many will respond to the proxy balloting. As of Sept. 19, there were 21.46 million shares of outstanding common stock and 246,540 shares of Series B preferred.

Simpson says her company’s opted to let Boca Raton, FL-based Compson Holding Corp. take the lead for counter offers. Goldstein too is waiting to see what the next moves will be by Sizeler and Compson.

Goldstein says he’d like to see Sizeler be more open with shareholders and Compson rather than rejecting a bid in part for the costs, but not airing the numbers for all to see. “What costs are there? They don’t say. It’s a fiduciary encumbrance on Sizeler to say what the costs are,” Goldstein stresses. “They must know what they are otherwise they’d have nothing to compare them to. We’ll have to wait and see what develops, but based on what I see now I’d probably vote against it.”

Compson president Michael Comparato is limited as to what he can say due to the pending offer, packaged in a joint venture play with Stamford, CT-based UBS Real Estate Investments. “I know nothing, more or less, than anybody else out there,” he says. “But, based on how this transaction has gone to date, there’s nothing that would surprise me.”

Tanz has abdicated his chairman’s seat and the $35,000 per quarter fee, with both torches passing to Sizeler’s two-year vice chairman William G. Byrnes. The word went out early Friday morning in a press release. When the NYSE bell rang, Sizeler’s per common share value was $15.03, down six cents for the day.

The official word in the SEC filing is Tanz’s “resignation was not the result of a disagreement with the company” The plan is not to fill the board opening. Other board members are Sidney W. Lassen, James W. McFarland, J. Terrell Brown and Richard L. Pearlstone.

According to SEC documents, Tanz was granted 150,000 non-qualified stock options Jan. 3 along with $35,000 per quarter through June 30, 2007 for serving as board chairman. Tanz was given the right to exercise the stock options at $14 per share between July 3 and Dec. 31, 2008. The options were subject to shareholder approval. Should shareholders reject an option exercise, Tanz would have been eligible for retroactive and future fees of $50,000 per quarter. The board Aug. 18 modified Tanz’s compensation “with the execution and delivery of the merger agreement” for an “in lieu of” on the option grant for the cash equivalent of $165,000 immediately prior to the merger’s closing. If Sizeler and the Canadian buyers get their way, the merger will close before Dec. 31.

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