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Agree to Disagree

What started as a behind-the-scenes buyout attempt bubbled into a public war as Agree Realty Corp., a small retail REIT that owns primarily single-tenant properties in 15 states, ispurned a third offer in May from privately-owned Compson Holding Corp. to acquire the REIT. Compson Holding Corp., a 50-year-old, family-run developer and owner with a portfolio of more than 9 million square feet of office, retail and residential properties on the East Coast, spent more than three months conducting due diligence and pursuing Agree. Compson currently owns 3.1 percent of Agree's outstanding shares.

At first, Compson offered $34.50 per share, and then $36.00 in private offers, says Michael A. Comparato, president of Compson. In early May it went public with an offer for $38.75 per share — $395.6 million — in an all-cash buyout. Less than a week later, Agree issued a terse release rejecting the offer and saying the company is “not for sale.”

Agree, which was founded by Richard Agree in 1971 and is headquartered in Farmington Hills, Mich., declined to elaborate on the release.

Compson is not ready to give up. “I could understand, although not agree, with a statement that the company is not for sale at $38.75, but to simply say the company is not for sale is absurd… Everything is for sale, it's just a matter of at what price.”

Comparato says Compson is interested in Agree because it has been investing heavily in single-tenant retail assets — $225 million to date this year — and Agree's portfolio meshes with that strategy. “We've told Agree that we're open to any suggestion, anything that works for them,” Comparato says. “We're pretty much indifferent to how we structure the transaction. It could be a merger, acquisition or purchase of assets.”

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