Wheeler REIT will not exchange series D preferreds; threshold not met

By Marisa Wong

Los Angeles, Jan. 23 – Wheeler Real Estate Investment Trust, Inc. announced the final results of its Nov. 22 offer to exchange its outstanding series D cumulative convertible preferred stock for $25-par 6% subordinated notes due 2028, according to an 8-K filing with the Securities and Exchange Commission.

As of the expiration of the offer at 11:59 p.m. ET on Jan. 20, holders had tendered 864,391 shares, or 26.8%, of the series D preferred stock.

The condition that holders of at least 66 2/3% of the outstanding shares of series D preferred stock tender their preferreds in the exchange offer and consent to the proposed amendments under the related consent solicitation has not been satisfied.

Therefore, the series D preferreds will remain outstanding with no change to their terms.

No shares of series D preferreds will be exchanged for notes and common stock, and tendered shares will be promptly returned to holders.

Previous offer amendments

As announced on Jan. 5, Wheeler had increased the consideration for each tendered and accepted share of series D preferred stock by offering 0.5 shares of common stock, in addition to the $16.00 principal amount of 6% notes initially offered.

Under the amended offer, the company offered to exchange up to a maximum of 2,112,103 shares of series D preferred stock, representing 67% of the outstanding series D preferreds. Originally, the company was offering to exchange any and all of the 3,152,392 of outstanding series D preferreds.

The revised offer was set to expire at 11:59 p.m. ET on Jan. 20. The offer was previously extended to 11:59 p.m. ET on Jan. 6 to allow shareholders additional time to tender their shares. The original expiration date was 11:59 p.m. ET on Dec. 22.

Consent bid

The company was also soliciting consents for the series D preferred stock.

Amendments in the consent solicitation included: eliminating provisions relating to cumulative dividend rights; eliminating mandatory redemption of the preferreds based on an asset coverage of at least 200%; taking away the right of series D holders to cause the company to redeem any or all of the preferred stock; removing the right of holders to elect two directors to the board if dividends are in arrears for six or more consecutive quarterly periods; providing for the mandatory conversion of the stock if the 20-day volume weighted average closing price of common stock exceeds $10.00 per share; eliminating the change of control; and providing that the company shall not be restricted from redeeming, purchasing or otherwise acquiring any shares of series D preferred stock.

The issuer noted before that shareholders who do not participate in the offer will be subject to the payout on the upcoming redemption date, which is likely to be made in common stock. Preferred holders would be receiving shares that would likely be a significant decrease in value.

The information agent is Kingsdale Advisors (866 228-8614, 416 867-2272, contactus@kingsdaleadvisors.com).

The dealer manager for the exchange offer and the solicitation agent for the consent solicitation is Odeon Capital Group LLC.

Virginia Beach-based Wheeler is a fully integrated, self-managed commercial real estate investment company that focuses on acquiring and managing income-producing grocery-anchored retail centers.

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