A California-based real estate group has made a $435 million bid to buyout Austin-based Stratus Properties.
Mill Valley, Calif.-based Capretta Properties Inc. made the offer on Jan. 22, Stratus shareholder Carl Berg announced Thursday. Berg, who controls 17.6 percent of Stratus’ stock, had previously called for Stratus executives to seek a sale of the business.
Stratus confirmed receipt of the “unsolicited” offer in a written statement obtained by the American-Statesman.
Stratus is best known for developing the downtown block that contains the W Austin Hotel and Residences and for the master-planned community Circle C Ranch. Other recent Stratus projects include the Escarpment Village and Parkside Village shopping centers in Southwest Austin. It’s currently wrapping up an H-E-B-anchored center in Lakeway and plans another shopping center featuring an H-E-B store in Magnolia, north of Houston.
Berg, a California real estate billionaire, said he received of copy of Capretta Properties’ letter to Stratus making the offer.
The offer was to purchase substantially all of Stratus’s real estate properties for $435 million cash, according to Berg. The offer also called for Stratus’ assets to be sold free of debt, and put Stratus’ current debt load at $255.6 million as of Sept. 30 of last year.
Capretta Properties’ letter described the offer as being worth about $27.60 per share for Stratus stockholders.
“The proposal is subject to several contingencies, including Capretta’s proposal that the closing be subject to completion of satisfactory due diligence, to be conducted only after entering into a definitive purchase agreement,” Stratus said in a written statement.
“The board of directors of Stratus, in accordance with its fiduciary duties, and consistent with its commitment to maximize long-term stockholder value, is in the process of carefully reviewing and considering the proposal. The board maintains its commitment to engaging in constructive dialogue with all stockholders. There can be no assurance that this process will result in any transaction in the future, and no decision has been made to enter into any transaction at this time.”
Berg made headlines recently when he suggested Stratus executives explore a sale of the company. Berg has also said he intends to nominate two new directors.
It’s not Berg’s first battle over an Austin-based, publicly traded company. In 2012, he ended his years-long financial support for Valence Technologies, a move many shareholders blamed for sending the company into bankruptcy.
In a written statement, Berg said: “After having submitted for a vote at the 2016 annual meeting a proposal requesting Stratus’ board of directors to engage an investment banker to explore a sale of Stratus, I am delighted to learn that four months before the expected date of that annual meeting Stratus has received an unsolicited offer from a credible party to purchase all of Stratus’ real estate assets.”
“To me, Capretta’s offer appears to have significant merit and represents an excellent point from which to begin the process of exploring the sale of Stratus…. After the Stratus shareholders have endured years of underperformance by Stratus, the board… needs to seriously and objectively evaluate Capretta’s offer and any other offers that Stratus receives, with the aim of allowing Stratus’ stockholders to realize the full value of Stratus’ real estate portfolio.”