LXP Industrial Trust receives $16/share offer from Land & Buildings

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LXP Industrial Trust (NYSE:LXP) received a $16/share cash offer from activist investor Land & Buildings.

The $16/share offer represents am 11% premium to LXP’s most recent closing price of $14.41 and a 22% premium to the $13.12 unaffected price prior to the investor announcing its engagement with LXP’s board in October, according to a Jan. 28 letter sent to LXP's CEO and board.

"We expect that the board will seriously consider our proposal and meet with us promptly," Jonathan Litt, the founder and CIO of Land & Buildings wrote in the letter.

Land & Buildings offer comes after the activist investor first started advocating for changes at the REIT in October, announcing its intent to nominate members to the company's board.

Land & Building's offer is condition upon due diligence and the activist investor said it has talks with several debt and equity financing sources and the financial institutions are "highly confident" of their ability to provide appropriate financing commitments

Land & Building's said it may be willing to increase its offer if "as a result of our due diligence we find evidence of additional value inherent in the company based on operating results, synergies or otherwise."

LXP said it's board will review the letter to determine the course of action that it believes is in the best interests of LXP’s shareholders.

Last month, Lexington Realty Trust changes name to LXP Industrial Trust.

Comments

[Philipsonh]

Will this mean the preferred issue will be called in due to change of control; many investors own the issue (with a face value of $50) at $57 per share and up.

[Rob G. in Vegas]

@Philipsonh Did you read the LXP+C prospectus?

[Philipsonh]

@Rob Grande Part of it, and right now LXP-C looks like a poor investment. Holders at $57 or so lose if it is called and may lose if the Reit is sold. The odds are against the preferred right now.
( That is my opinion ).

[Rob G. in Vegas]

@Philipsonh It is a busted convertible and can't be called at this time, but yes - a buyout by a private entity could cause some LXP+C holders to throw in the towel and redeem their preferred shares at $50/share.

I don't see LXP selling out anytime soon unless the price is outrageously high and $16/share from Land and Buildings won't interest them.

[AlieGee]

Stock went sideways from 2013 to 2020.....Class A Premium properties.

At 16 it would be giving the company away.

[Raleigh Reid]

an offer that's just 25bp over the recent high, looks non serious to me. no thanks Mr. Litt.

[SammyDaBull23]

@Raleigh Reid Trying to elicit counter offers at a higher price since he is a shareholder.

[bale002]

More editing problems at SA.

[AntiochAndy]

The offer of $16/share seems a little low in light of all the value Land and Buildings claimed was untapped in LXP.

[Beyond Saving]

@AntiochAndy 20x FFO seems like a generous offer to me, LXP is a mediocre industrial REIT. L&B is way late to this party. I realized my gains already, but I think shareholders should be happy with an exit at $16.

[AntiochAndy]

@Beyond Saving Perhaps, but I doubt that L&B is in business for the purpose of being generous. It seems to me that people who have held LXP for some time while waiting for the transformation of its portfolio are about to possibly reap some rewards for their patience and that L&B would like to get those rewards for itself and leave current stockholders out.

[User 50421874]

@AntiochAndy I agree. It has taken a long time to transition into an industrial Reit.