Veris Residential Inc.’s assertions that Kushner Cos.’ unsolicited $16-per-share offer to acquire the Jersey City target is too low haven’t fallen on deaf ears, with that New York-based suitor upping its bid by $2.50 per share in December.
Two increased proposals were revealed in a public correspondence sent from the Veris board of directors to Kushner Cos. Chairman Charles Kushner dated Dec. 12, which again indicated a unanimous rejection of the most-recent, $18.50 per share offer. The email also laid the groundwork for future efforts on the matter, in an attempt to facilitate a “constructive dialogue” between the two parties.
“While we continue to believe that your most recent proposal undervalues Veris Residential, as we have consistently communicated, the Board remains open to working constructively with you – or any interested party – to maximize value for all Company shareholders,” the letter reads.
Since Kushner Cos.’ attempts to take control of Veris were made public in October, the companies have cycled through offers, rejections and barbs. Veris dismissed a proposal from the end of November that came with the expressed backing of Fortress Investment Group.
As indicated by this latest correspondence, a $17.50 per share offer was later received Dec. 1. Eight days after that, Kushner submitted another proposal offering $18.50 per share, according to the letter — a bid that was rejected unanimously during a Dec. 11 board meeting including Veris financial advisors Goldman Sachs & Co. LLC and J.P. Morgan and legal counsel Cadwalader, Wickersham & Taft LLP.
As of 12:00 p.m. EST on Dec. 12, Veris – the owner operator, developer and acquirer of primarily multifamily properties that rebranded from the former Mack-Cali Realty Corp. a year ago this month – was trading at $16.52.
Aside from its unwavering stance that offers from Kushner do not take into account the “substantial, long-term” value that is expected to result from Veris’ transformation, the most-recent and increased offers were highlighted for their lack of updated financial support, like what was seen with the attempt made at the end of November.
“While the Board shares your hope of engaging in ‘serious, constructive, and direct negotiations,’ we remind you that the Board has requested that any proposal, in addition to fully compensating shareholders for the intrinsic value of their shares, be supported by information regarding certainty of financing sources and further assurances from them that they are prepared to transact at the revised valuation,” the Dec. 12 correspondence reads. “The Board notes that your latest two proposals, beyond undervaluing the Company, were not qualified given they lacked financing support at your revised valuations.”
To move forward in good faith, Veris offered a potential meeting between the parties’ legal and financial advisors and Kushner Cos.’ financing partner “to better understand the financing sources and uses for a potential transaction, financing work completed to date, plans to backstop the pending non-strategic assets sales, and any additional requirements your financing partner needs to provide a full equity and debt commitment to support a potential transaction.”
After that, the board said it would be ready to offer a standard non-disclosure agreement and, upon execution, be able to engage more openly and better convey the value potential of the company.
In 2021, Kushner Cos. said it acquired more than 7,000 apartments as it extended its reach across the nation, particularly in the Southeast. The company did not immediately respond to a request for comment.l