According to a report by Reuters, Emmett Investment Management may nominate directors to Whitestone REIT’s six-member board.
Hedge fund Emmett Investment Management is reportedly preparing for a potential boardroom fight at Whitestone REIT (WSR) and may nominate directors to the shopping center operator’s six-member board.
Whitestone’s stock edged 0.16% lower, but retail sentiment on Stocktwits trended in ‘bullish’ territory over the past day.
People familiar with the matter told Reuters that the hedge fund has grown frustrated with Whitestone’s capital allocation and has criticized its governance. It added that the development comes as Whitestone faces mounting activist pressure amid sluggish growth in U.S. real estate. The report cited that Emmett owned 2.2% of the company at the end of the second quarter, making it the sixth largest investor.
Insiders told Reuters that Emmett believes Whitestone’s future looks dim without meaningful changes. This marks the second time that Whitestone will be heading into a proxy battle. The company, valued at about $633 million, rebuffed a $15-per-share takeover offer from MCB Real Estate last year, signaling its preference to remain independent despite investor pressure.
Meanwhile, Emmett is reportedly preparing for what would be its first proxy contest, aiming to replace most of the six directors on Whitestone REIT’s board, people familiar with the matter said. The New York-based hedge fund, which manages about $150 million, is pushing its campaign as demand for open-air shopping centers climbs, according to analysts cited by Reuters. Houston-based Whitestone owns 57 properties totaling 5.1 million square feet across Phoenix, Austin, Dallas-Fort Worth, Houston, and San Antonio.
Whitestone’s stock is down 11% this year and has fallen more than 6% over the past 12 months..<
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