Whitestone REIT said to face new board challenge as Emmett pushes for board seats

Emmett Investment Management is poised to challenge Whitestone REIT by nominating new board members due to concerns over the company's governance and capital strategies, marking a potential activist contest.

Holding a 2.2% stake, Emmett has criticized Whitestone's future prospects and is likely to initiate a proxy contest to replace most of the current board members.

This anticipated contest would be Whitestone's second in two years, following a successful defense against a board challenge last year and an acquisition offer that was rejected.

Recommendation Rating: Potential Activist Contest Ahead for Whitestone REIT

Whitestone REIT (NYSE: WSR) could be gearing up for a renewed challenge from activist investors, as hedge fund Emmett Investment Management is reportedly preparing to nominate new board members. This move follows Emmett's criticisms regarding the company's governance and capital strategies, as revealed in a recent media report.

As one of Whitestone's significant shareholders, Emmett holds a 2.2% stake in the company as of the conclusion of the second quarter. The firm has signaled concerns about the shopping center operator’s future, suggesting that its prospects are grim unless substantial changes are implemented. Emmett is reportedly preparing to initiate its first proxy contest, aiming to replace most of the current board members, according to sources familiar with the situation.

Should this proceed, it would be Whitestone's second proxy contest in just two years. The company successfully fended off a board challenge last year and turned down a $15-per-share acquisition offer from MCB Real Estate.

In late morning trading, shares of WSR saw a slight increase of 0.6%.

At this time, neither Whitestone nor Emmett have responded to requests for comment regarding this developing situation.