Key Summary: On March 10, 2023, Daniel M. Negari and Michael R. Ambrose (5.4%) urged the company to sell a property for share buybacks and proposed acquiring all shares for $8.88 each on April 17. By September 27, Negari (6%) reiterated his proposal and suggested alternatives like selling non-core assets. On January 13, 2021, Lionbridge Capital and Robotti Advisors (3.16%) nominated six board candidates, suggesting a strategic review, including possible asset liquidation. They formed a 13D Group on May 25, 2021, accused the company of SEC violations on June 10, and reduced their stake below 5% by June 28. On May 18, 2020, Engine Capital (6.2%) urged against equity raises and suggested liquidation or sale, later nominating six board candidates on December 11, 2020, and reducing its stake below 5% by June 10, 2021.Market Cap: $94 million | Creative Media & Community Trust Corporation is a real estate investment trust that primarily acquires, owns, and operates Class A and creative office assets in vibrant and improving metropolitan communities throughout the United States.
On March 10, 2023, Daniel M. Negari and Michael R. Ambrose (together, 5.4%) issued an open letter to the company and fellow stockholders regarding potential actions the company can take to maximize value for stockholders. They stated that the company should sell this property now, recycle the capital into share buybacks through a tender offer or any other available means. They stated that at various cap rates and net operating income values, the hotel could yield $133MM - $214MM per share in a fire sale. That conservatively translates to between $5.86 and $9.42 per share based on the most recent share count.
On April 17, 2023, Mr. Negari delivered a letter to the Board in which Mr. Negari proposed to acquire all of the outstanding shares of the company for $8.88 per Share in cash.
On September 27, 2023, Mr. Negari (6%) sent an open letter to the Board reemphasizing his acquisition proposal. He also outlined alternative strategies for shareholder value enhancement, such as selling non-core assets and repurchasing shares, or selling all assets and returning capital to shareholders if the Board remains against starting a sales process.
Past
Lionbridge Capital and Robotti Advisors
On January 13, 2021, Lionbridge Capital and Robotti Advisors (together, 3.16%) issued a press release announcing the nomination of six candidates for election to the Board at the company’s 2021 annual meeting of stockholders. Additionally, they sent a letter to the Board expressing their concerns as well as highlighted potential opportunities for the company to maximize stockholder value. They expressed their concerns that the Board might be favoring the interests of the company's external operator and administrative services provider to the detriment of the stockholders. As indicated in the letter, Lionbridge Capital and Robotti Advisors anticipate that a newly constituted board would undertake a strategic review of the company exploring all options, including a sale for cash and/or a mix of cash and securities of another publicly traded company, or, if appropriate, an orderly liquidation of CMCT’s assets. Source
On May 25, 2021, Lionbridge and Robotti entered into a 13D Group Agreement with Winthrop Realty Partners, L.P. and Michael L. Ashner and filed a proxy statement seeking support for their nominees.
On June 10, 2021, the shareholder group led by Lionbridge Capital, Robotti & Company, Inc, and Winthrop Realty Partners (together 6%) uncovered serious SEC disclosure violations by the company. It revealed that the company has failed to properly disclose its entrenchment-driven 6.25% ownership limitation since 2019. Further, it called on the Board to immediately cease its scorched-earth tactics and engage with them constructively to address the structural issues they have identified and work to unlock stockholder value. Also, it requested that the Board grant a waiver with respect to the “Aggregate Stock Ownership Limit” and the “Common Stock Ownership Limit” as set forth in the company’s charter. Source
On June 15, 2021, Winthrop Realty Partners delivered a notice to Lionbridge and Robotti that they were electing to terminate their respective obligations under the Group Agreement and withdraw from the Group effective June 16, 2021. Source
On June 28, 2021, Lionbridge Capital and Robotti Advisors reduced their stake below 5%.
Engine Capital
On May 18, 2020, Engine Capital disclosed a 6.2% and sent a letter to the Board expressing its concerns as well as highlighted potential opportunities for the company to maximize stockholder value. Engine Capital expressed its concerns that the Board might be favoring the interests of the company’s external operator and administrative services provider to the detriment of the stockholders. Given the significant discount to net asset value that the shares trade, Engine Capital called on the Board to immediately stop any plans to raise equity at this point in time, and expressed its belief that a liquidation or a sale represents the best risk-adjusted path forward for stockholders.
On December 11, 2020, Engine Capital issued a press release announcing the nomination of six independent candidates for election to the Board at the 2021 annual meeting of stockholders.
On June 10, 2021, Engine Capital reduced its stake to below 5%.
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