Dividend Capital Diversified Property Trust Advises Investors on Tender Offer

As previously announced, Dividend Capital Diversified Property Trust (DPF) shareholders were recently issued a tender offer by Coastal Realty Business Trust (CRBT), an affiliate of Mackenzie Capital Management. DPF’s board of directors has advised stockholders to reject the offer.

As a public-reporting daily NAV vehicle, DPF invests in a diversified portfolio of commercial real estate and as of June 30, 2014, the company owned 68 properties across 24 geographical markets, totaling 11.7 million square feet.

Expiring on November 7, 2014, CRBT’s offer is to purchase up to 8,400,000 shares of Class E common stock at a price of $3.50 per share, in cash. If that many shares were tendered CRBT would own 5.05% of outstanding Class E shares when combined with the 0.09% it already owns.

DPF has determined the company’s net asset value is equal to $7.09 per share, dramatically higher than CRBT’s offer.

In a letter to stockholders, Richard D. Kincaid, Chairman of the Board of DPF, wrote, “…we believe that the CRBT Offer is not in the best interests of our stockholders because, among other reasons, the Board believes that the offer price is less than the current and potential long-term value of the Class E shares.” He continued, “We believe that you should view CRBT as an opportunistic purchaser that is attempting to acquire your shares cheaply in order to profit at your expense.”

The board of directors came to its conclusion by evaluating CRBT’s offer with members of management and a representative from DLA Piper LLP (US), DPF’s outside counsel.