Hedge Funds Wrestle For Influence As Foundering REIT Makes Good on Plan to Sell Assets
Looking to shed more property and debt, Maguire Properties, Inc. (NYSE: MPG
) will sell its 607,000-square-foot Main Plaza office property in Orange County, CA to San Francisco-based Shorenstein Properties LLC for $211 million, or about $347.61 per square foot.
The sale comes as two of Los Angeles-based Maguire’s largest shareholders, hedge funds Third Point LLC and JMB Capital Partners LP, stepped up pressure on the company, whose shares have fallen 65% over the last year, making it one of the worst-performing REITs in the U.S.
New York-based Third Point, managed by Daniel Loeb, disclosed that the company received an unsolicited takeover bid of $20 per share valued at about $940 million -- 37% higher than MPG’s closing price July 7 of $12.60 -- and urged the company’s board of director to reopen talks with the potential acquirer, named in published reports as Pacific Office Properties Trust Inc. The company reportedly made and withdrew the bid last month.
Another major investor, JMB Capital Partners LP of Century City, which owns 4.65 million shares, said in a filing it now owns a 9.7% stake in Maguire and will seek to take control of the board at the company’s annual meeting in October.
The sale of Main Plaza announced Tuesday for nearly $10 million in cash and about $161 million in assumed debt is expected to close during the current quarter. Main Plaza, located in the John Wayne Airport submarket of Irvine, CA, includes two 12-story Class A office buildings and two free-standing buildings.
Maguire President/CEO Nelson C. Rising, who took over control of the company from founder Rob Maguire in May, said the sale "demonstrates our commitment to our stated objective of disposing of certain Orange County properties to accomplish our balance sheet goals."
The REIT, the largest office landlord in Los Angeles, announced last month it would sell its 105-acre Park Place mixed-use development property in Irvine through Eastdil Secured and had resumed or started talks to sell certain other OC properties. The announcement included the departure of Chief Financial Officer Martin Griffiths and two other senior executives.
Maguire announced yesterday it has appointed Christine N. Garvey to the board to fill its vacant seat.