By Apratim Sarkar
April 9 (Reuters) - Whitestone REIT will be acquired by funds managed by Ares Management Corp in an all-cash deal, valuing the U.S. shopping center owner at about $1.7 billion, the company said on Thursday.
Shares of Whitestone REIT jumped 11.5% to $18.90 in early trading, their highest on record. Ares Management was down more than 1%.
Ares will acquire all of Whitestone's outstanding common shares and operating partnership units for $19 apiece in cash, taking the firm private. The
offer represents a 12.2% premium to Whitestone's closing share price on Wednesday.
The deal comes after months of takeover interest and shareholder pressure at Whitestone, as private equity firms increasingly target neighborhood retail properties in high‑growth markets.
Private equity firms such as Blackstone and TPG had expressed interest in buying Whitestone REIT in March.
Craig Kucera, an analyst at Lucid Capital Markets, said the pricing appears fair for a neighborhood retail REIT with solid growth prospects, particularly given Whitestone's exposure to fast-growing markets in Arizona and Texas.
The company has faced pressure from activist hedge fund Emmett Investment Management, which had been preparing for a potential boardroom fight and was considering nominating directors to Whitestone's six-member board, Reuters reported in August last year.
Emmett, led by Alexander Rohr, is a long-term shareholder and had previously raised concerns over Whitestone's capital allocation and corporate governance.
"The valuation looks fair relative to recent private‑market transactions," Kucera said, adding that persistent activist pressure may have helped push the company toward a take-private deal.
The deal with Ares has been unanimously approved by Whitestone's board of trustees and is expected to close in the third quarter of 2026, subject to customary closing conditions, including approval by the company's shareholders.
(Reporting by Apratim Sarkar; Editing by Mrigank Dhaniwala and Maju Samuel)
