Shareholders renew pressure on Maguire Properties
One hedge fund urges the board to reconsider an offer for the real estate giant. Another seeks to oust directors who backed departed founder Robert Maguire.
Less than two months after Maguire Properties Inc. ended a power struggle with the appointment of a new chief executive, the Los Angeles office landlord is again under pressure from dissident shareholders.
Now two hedge funds have renewed efforts to reshape the company that is the largest owner of premium office space in downtown Los Angeles. Its holdings include US Bank Tower, the tallest building in the West.
On Monday, one fund urged the board of directors to reconsider a previous offer to buy the company and another called for the ouster of board members who supported departed founder Robert F. Maguire.
It was the latest chapter in an ongoing battle for control of the company that started more than six months ago and appeared to conclude in May when board members rejected Maguire's offer to buy the company and replaced him with his onetime protege Nelson Rising. Since then Rising has announced plans to sell properties and revive the company's finances. He has also replaced some top executives.
Leading the attack Monday were Third Point of New York and JMB Capital Partners of Century City. Each hedge fund owns a substantial chunk of the real estate investment trust.
Third Point said in a filing with the Securities and Exchange Commission that a prospective buyer had offered about $20 a share to buy Maguire Properties. The offer, worth about $939.7 million, has been withdrawn but could be renewed by the board, Third Point said.
"It is in the best interests for the company" to assist the buyer that made the offer "and any other viable bidder who may surface, in preparing a premium offer for the company," Third Point said.
Third Point owns almost 9% of Maguire's shares and is managed by Daniel Loeb, who has a reputation for publicly criticizing business executives of whom he disapproves. A Third Point spokeswoman declined to elaborate on the statement and Maguire Properties did not respond to requests for comment.
Real estate industry newsletter REIT Newshound said the firm making the $20-a-share offer was Pacific Office Properties, a Santa Monica REIT. Pacific Office executives could not be reached.
Shares of Maguire have fallen 65% in value in the last year, making it one of the worst-performing REITs in the country and helping lead to the departure of its founder. The stock closed up 5% at $12.60 a share Monday.
Some analysts were dismissive of Third Point's statement and consider a sale unlikely any time soon.
