Hedge fund Emmett Investment Management is preparing for a potential boardroom battle at Whitestone REIT and is considering nominating directors to the shopping centre operator’s six-member board, according to a report by Reuters.
The report cites unnamed people familiar with the matter as highlighting that New York-based Emmett, led by Alexander Rohr, has been a long-term shareholder in the Houston-headquartered REIT and currently holds a 2.2% stake, making it the company’s sixth-largest investor. The fund has privately expressed frustration over Whitestone’s capital allocation and governance, sources said.
A proxy contest would mark Whitestone’s second in as many years. The REIT last year fended off another board challenge before rejecting a $15 per share takeover bid from MCB Real Estate. Since then, Whitestone’s stock has fallen more than 14%, closing at around $12.40 on Wednesday and valuing the company at approximately $633m.
Emmett, which manages around $150m in assets, is weighing whether to push for significant board changes, potentially replacing a majority of Whitestone’s directors. If launched, it would be the hedge fund’s first proxy contest.
Whitestone owns and operates 57 open-air retail centres across Phoenix, Austin, Dallas-Fort Worth, Houston and San Antonio, comprising 5.1 million square feet of leasable space. With limited new supply of strip malls and strong demand from tenants such as restaurants and personal care services, industry analysts note that these assets remain in high demand.
