☐ | Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
☐ | Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
ITEM 1. | SUBJECT COMPANY INFORMATION. |
ITEM 2. | IDENTITY AND BACKGROUND OF FILING PERSON. |
ITEM 3. | PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS. |
ITEM 4. | THE SOLICITATION OR RECOMMENDATION. |
(a) | Solicitation Recommendation. |
(b) | Background. |
(c) | Reasons for the Recommendation. |
• | On March 18, 2024, Board of Directors approved an estimated NAV per Share of $9.84 as of December 31, 2023 based on the estimated fair value of the assets and liabilities of the Company as of December 31, 2023. |
• | The Tender Offer price of $5.37 per Share is 45% less than the most recently published estimated NAV per Share of $9.84. |
• | The Company’s most recently published estimated NAV per Share of $9.84 as of December 31, 2023 was calculated as of a specific date. Accordingly, the value of Shares may fluctuate over time in response to developments related to individual assets in the portfolio and the management of those assets and in response to the real estate and capital markets. These risks have not been priced into the estimated NAV per Share of $9.84. There is no assurance of the extent to which the most current estimated valuation should be relied upon for any purpose after its effective date. |
• | For a full description of the methodologies and assumptions, as well as certain qualifications, used to determine the estimated values the Company’s assets and liabilities in connection with the calculation of its most recently published estimated NAV per Share of $9.84, see “Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities– NAV and NAV Per Share” of the Company’s 2023 Form 10-K, which is incorporated herein and can be found in the “SEC Filings” section of the Company’s website, www.lightstonecapitalmarkets.com and is on the SEC’s website at www.sec.gov. |
• | Given the Tender Offer price of $5.37 per Share, the Company’s Board of Directors believes that the Tender Offer represents an opportunistic attempt by the Offeror to make profit by purchasing the Shares at a deeply discounted price relative to their most recently published estimated NAV per Share of $9.84, thereby potentially depriving the stockholders who tender Shares in the Tender Offer of the full value of their Shares as well as the opportunity to realize the full potential long-term value of their investment. |
• | As described further in Item 8 below, the Company is commencing a Self-Tender Offer for up to 700,000 Shares at $6.00 per Share; we note, however, that the Company may have the right to amend, extend or, upon certain specified conditions, terminate the Self-Tender Offer. While the Board of Directors has approved the Self-Tender Offer, the Board of Directors recommends that Stockholders NOT tender their Shares. |
• | The Offeror states in the Offer to Purchase, that during “the period between January 2, 2024 and April 2, 2024, CTT Auctions, an affiliate of CTT, reported secondary market trading prices ranging from $4.20 to $4.25 for shares of the [Company’s] common stock.” The Offeror acknowledged that “CTT Auctions is only one of multiple trading platforms for non-traded REITs and, therefore, that its secondary market trading information may be limited.” As such, the Board of Directors cautions Stockholders against relying on reports regarding secondary market transactions as an indication of value of the Shares given the lack of a trading market. |
• | The Offeror acknowledges that it “has not made an independent appraisal of the Shares or the [Company’s] properties in connection with the [Tender] Offer and is not qualified to appraise real estate.” The Board of Directors and the Company’s management believes this illustrates the lack of credibility of the Offeror’s valuation methodologies and the inadequacy of the Tender Offer price. |
• | The Offeror states in the Offer to Purchase that the Offeror is “making the [Tender] Offer for investment purposes and with the intention of making a profit from the ownership of the Shares. In establishing the purchase price of $5.37 per Share, the [Offeror] is motivated to establish the lowest price which might be acceptable to [Stockholder’s] consistent with the [Offeror’s] objectives. |
• | The Shares have limited liquidity and since March 2020, the Company has not considered repurchase requests pursuant to its share repurchase program with the exception of those requests submitted in connection with a Stockholder’s death and hardship that resumed in May 2021. |
• | The Tender Offer is subject to certain conditions, some of which provide the Offeror with the “reasonable” discretion to determine whether the conditions have been met, such as the Offeror’s determination as to whether there has been any change or development that is or will be materially adverse to the Company or that will have a material adverse effect on the value of the Shares. In addition, the Board of Directors noted that the Tender Offer can be amended, including to reduce the consideration paid for the Shares, or terminated with 10 business days’ notice to Stockholders. Accordingly, the Board of Directors notes that there could be no assurance that the Tender Offer would be completed as soon as the Offeror implies, or with the same terms and conditions, including without limitation, the Tender Offer price. |
(d) | Intent to Tender. |
ITEM 5. | PERSON/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED. |
ITEM 6. | INTEREST IN SECURITIES OF THE SUBJECT COMPANY. |
ITEM 7. | PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS. |
ITEM 8. | ADDITIONAL INFORMATION. |
ITEM 9. | EXHIBITS. |
| | | | LIGHTSTONE VALUE PLUS REIT II, INC. | |||||
| | | | | | ||||
| | | | By: | | | /s/ Seth Molod | ||
| | | | Name: | | | Seth Molod | ||
| | | | Title: | | | Executive Vice President and Chief Financial Officer | ||
| | | | | | ||||
Dated: | | | April 24, 2024 | | | | |
Exhibit No. | | | Document |
| | Text of Letter to the Company’s Stockholders, dated April 24, 2024* | |
| | Text of Email to Financial Advisors* | |
| | Excerpts from the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 27, 2024** |
* | Filed herewith. |
** | Incorporated herein by reference. |
![]() | | | 1985 Cedar Bridge Avenue, Suite 1 Lakewood, New Jersey 08701 Lightstronegroup.com |
(1) | For a full description of the methodologies and assumptions, as well as certain qualifications, used to determine the estimated values of the Company’s assets and liabilities in connection with the calculation of its NAV per Share of $9.84, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 27, 2024. Please note that the Company’s most recently published estimated NAV per Share of $9.84 is as of December 31, 2023 and was calculated as of a specific date. Accordingly, the value of the Shares may fluctuate over time in response to developments related to individual assets in the portfolio and the management of those assets and in response to the real estate and capital markets. These risks have not been priced into the Company’s estimated NAV per Share of $9.84. There is no assurance of the extent to which the most current estimated valuation should be relied upon for any purpose after its effective date. |
(1) | For a full description of the methodologies and assumptions, as well as certain qualifications, used to determine the estimated values of the Company’s assets and liabilities in connection with the calculation of its NAV per Share of $9.84, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 27, 2024. Please note that the Company’s most recently published estimated NAV per Share of $9.84 is as of December 31, 2023 and was calculated as of a specific date. Accordingly, the value of the Shares may fluctuate over time in response to developments related to individual assets in the portfolio and the management of those assets and in response to the real estate and capital markets. These risks have not been priced into the Company’s estimated NAV per Share of $9.84. There is no assurance of the extent to which the most current estimated valuation should be relied upon for any purpose after its effective date. |
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