Kushner bites back in Veris response

In a letter from its chairman, Kushner Cos. doubled down on its position regarding its play for Veris Residential Inc., writing that the company’s “leadership team has no clear long term plan to maximize the value of the portfolio, nor are they the right team to execute.”

The Nov. 3 correspondence comes in response to a rejection sent by the Jersey City-based REIT earlier the same day to Chairman Charles Kushner regarding his company’s unsolicited offer to either acquire or externally manage Veris.

Kushner Cos. is a shareholder of Veris and, according to its Oct. 20 communication to the board of directors, one of the six largest, having accumulated 4.5 million shares over five months.

Addressing the board of directors Thursday, Kushner wrote, “I received your letter which I found to be uninformed at best and disingenuous at worst.”

The chairman goes on to rebut points from Veris’ note, including that company’s alleged inability to substantiate Kushner Cos. available capital. “Kushner’s bid is fully capitalized and committed, which Kushner is happy to substantiate and disclose to the Board if the Board is actually interested in engaging with us,” he wrote.

“Lip service does not qualify as engagement,” Kushner added.

In the same vein, and mirroring a similar argument by the would-be target regarding transparency, Kushner said Veris has mischaracterized past experiences between the organizations and that the board of directors has “consistently misled Kushner,” which it says, again, casts doubt on the the capabilities of Veris’ leadership.

Explaining its “abruptly withdrawn bid,” as Veris described it, for Harborside 1/2/3 in Jersey City, Kushner said the company never wanted the properties on their own — and that the Veris board was aware. “After being misled for a month, we withdrew an offer for Harborside we were told by the Board to make, left with the unmistakable impression the Board doesn’t know what they’re doing,” Kushner wrote.

Veris’ earlier response called into question Kushner Cos.’ analysis of its performance and said its offer to acquire the company for $16 per share undervalued the REIT’s current state in addition to its potential value as the company transitions to a pure-play multifamily focus. According to Reuters, analysts have pegged a more appropriate price at between $21.50 and $26 per share.

“With respect to performance, the proof is in the pudding,” Kushner hit back. “We’ve distributed hundreds of millions of dollars to our partners over the past 2 years and Veris has distributed zero. The market clearly believes in Kushner more than Veris’ management team given recent stock performance. Veris announced the effective completion of their ‘strategic transformation’ and the only people who bought the stock were insiders in receipt of Kushner’s overtures. Kushner announced their proposals to the public and the market drove the stock price to levels 50% above last month’s all time lows.”

As of 2:25 p.m. EDT on Nov. 3, Veris stock was trading at $15.45.

Over the past few months, Veris said it has received four proposals from Kushner Cos., leading it to disclose its prior communications.

Kushner Cos. has now followed suit.

“We will be making our proposal public since this Board and management team are more focused on enriching themselves than shareholders,” Kushner wrote.