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UPDATE: Largest Shareholder Ups Pressure on Wilshire to Sell or Liquidate
By Eric Peterson Last updated: April 6, 2006 10:22am
(To read more on the debt and equity markets, click here.)
NEWARK-Mercury Real Estate Advisors has increased the pressure on locally based Wilshire Enterprises, demanding the troubled real estate company’s immediate sale or liquidation. The Greenwich, CT-based Mercury is Wilshire’s largest unaffiliated shareholder, owning a reported 14.6% of the company.
The demand comes in a letter to Wilshire’s board, dated today and signed by Mercury CEO David R. Jarvis and president Malcolm F. McLean IV. It’s a follow-up to a letter Mercury sent to Wilshire’s board this past November, a missive that criticized the latter’s turnaround strategy. At the time, Mercury also offered to pursue an acquisition of all outstanding shares of Wilshire for $8.50 per share subject to several conditions.
In the latest letter, the Mercury execs state that, “the only response…to the offer has been confirmation of its receipt. Your lack of a substantive response and continued focus on a seemingly imaginary process with an investment banks leads us to believe that this hiring of an advisor is pure eyewash to somehow suggest that the board is progressing towards maximizing shareholder value.”
The last is a reference to Wilshire’s announcement, in January, that it had hired consultants Friedman, Billings, Ramsey & Co. “to conduct a strategic review regarding alternatives to maximize shareholder value,” Wilshire chairman/CEO Sherry Wilzig Izak stated at the time. Today’s letter is particularly harsh on Wilzig Izak, demanding that she be “immediately terminated” by Wilshire’s board “to end corporate waste.
“We only see a company that has continually wasted corporate profits on exorbitant compensation for a part-time [CEO]…. [We see] a board that is not fulfilling its fiduciary duties to the true owners of the company.” The Mercury execs also demand “an immediate meeting with Mr. Eric Schmertz, the proclaimed independent board member, who should be representing the interests of the shareholders.” A call to Wilshire was not returned by deadline.
The latest Wilshire saga began in early 2004 when the company announced a turnaround strategy that, in the short term, involved selling off the company’s holdings in the Northeast to focus on such Sunbelt states as Arizona, Texas and Florida, and in the long term pursuing a possible sale or merger. Since then Wilshire has effectively sold off its New Jersey holdings, including the Wilshire Grand Hotel in West Orange, acquired by an investor group for $12.75 million. Early this year, Wilshire sold an apartment complex in Long Branch for nearly $7 million, and a couple of smaller properties.
UPDATE: Largest Shareholder Ups Pressure on Wilshire to Sell or Liquidate
By Eric Peterson Last updated: April 6, 2006 10:22am
(To read more on the debt and equity markets, click here.)
NEWARK-Mercury Real Estate Advisors has increased the pressure on locally based Wilshire Enterprises, demanding the troubled real estate company’s immediate sale or liquidation. The Greenwich, CT-based Mercury is Wilshire’s largest unaffiliated shareholder, owning a reported 14.6% of the company.
The demand comes in a letter to Wilshire’s board, dated today and signed by Mercury CEO David R. Jarvis and president Malcolm F. McLean IV. It’s a follow-up to a letter Mercury sent to Wilshire’s board this past November, a missive that criticized the latter’s turnaround strategy. At the time, Mercury also offered to pursue an acquisition of all outstanding shares of Wilshire for $8.50 per share subject to several conditions.
In the latest letter, the Mercury execs state that, “the only response…to the offer has been confirmation of its receipt. Your lack of a substantive response and continued focus on a seemingly imaginary process with an investment banks leads us to believe that this hiring of an advisor is pure eyewash to somehow suggest that the board is progressing towards maximizing shareholder value.”
The last is a reference to Wilshire’s announcement, in January, that it had hired consultants Friedman, Billings, Ramsey & Co. “to conduct a strategic review regarding alternatives to maximize shareholder value,” Wilshire chairman/CEO Sherry Wilzig Izak stated at the time. Today’s letter is particularly harsh on Wilzig Izak, demanding that she be “immediately terminated” by Wilshire’s board “to end corporate waste.
“We only see a company that has continually wasted corporate profits on exorbitant compensation for a part-time [CEO]…. [We see] a board that is not fulfilling its fiduciary duties to the true owners of the company.” The Mercury execs also demand “an immediate meeting with Mr. Eric Schmertz, the proclaimed independent board member, who should be representing the interests of the shareholders.” A call to Wilshire was not returned by deadline.
The latest Wilshire saga began in early 2004 when the company announced a turnaround strategy that, in the short term, involved selling off the company’s holdings in the Northeast to focus on such Sunbelt states as Arizona, Texas and Florida, and in the long term pursuing a possible sale or merger. Since then Wilshire has effectively sold off its New Jersey holdings, including the Wilshire Grand Hotel in West Orange, acquired by an investor group for $12.75 million. Early this year, Wilshire sold an apartment complex in Long Branch for nearly $7 million, and a couple of smaller properties.
posted by Jones Lang LaSalle NJ News Blog at 12:24 PM
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