NEW YORK, Dec 12 (Reuters) - Veris Residential Inc said it is rejecting a new unsolicited bid from Kushner Cos saying the sweetened offer is still too low and that it lacks financing, according to a letter reviewed by Reuters.
Kushner this month proposed to pay $18.50 a share for Veris, which specializes in New Jersey and Boston rental apartments, after having offered to pay $17.50 in early December. Neither bid has been publicly reported.
For Veris this marks the fifth and sixth times this year Kushner made approaches after proposing to pay $16 per share in October.
“We continue to believe that your most recent offer undervalues Veris Residential,” the letter said.
The latest bid values Jersey City, New Jersey-headquartered Veris at about $4.7 billion, including debt. Analysts have said a price between $21.50 and $26 a share would be more appropriate.
Veris extended an olive branch to Kushner saying it appreciates the revised offers and suggests both sides’ financial and legal advisors speak to get a better understanding of the financing sources for a potential transaction.
Any bid from Kushner would still have to be higher, however, as the most recent offers fail to reflect the scarcity of Veris’ multi-family assets, said a person familiar with the matter but not authorized to speak publicly for Veris.
Veris also said it is ready to sign a standard non-disclosure agreement with Kushner, which would allow Kushner to “more clearly understand the value of Veris.”
A representative for Kushner did not immediately respond to a request for comment.
Kushner is run by Charles Kushner - the father of former President Donald Trump’s son-in-law Jared Kushner.
Last month, Kushner told Veris that Fortress Investment Group had agreed to help finance the $16 a share bid.
But neither of the next two bids - for $17.50 and then for $18.50 - were accompanied by information about the certainty of the financing sources or assurances from other parties that they would be willing to transact at the revised valuations, the Veris letter said.
The latest offer for Veris, formerly called Mack-Cali Realty Corp, coincides with the real estate sector struggling with rising costs and a drop in demand due to higher home prices and mortgage rates. Veris is an unusual asset given the low age of its assets and average monthly rent per home, according to a company presentation.
Kushner Cos previously said in a public presentation that the Veris board has “repeatedly rebuffed proposals”, adding that Veris directors have “presided over a multi-year record of financial and operational mismanagement.”
Veris’ stock price, which is down more than 14% since January, closed trading at $16.05 on Friday. The stock price climbed in the last few weeks, in part because the Veris board has rejected the lower bid, analysts said. (Reporting by Svea Herbst-Bayliss; editing by Grant McCool)
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