Blackwells Capital Issues Letter to Shareholders of The Necessity Retail REIT, Inc (“RTL”) Ahead of Critical Vote at the 2023 Annual Meeting
18 Abril 2023 - 5:15PM
Business Wire
Current Board has Failed Shareholders by
Presiding Over Abysmal Financial Results, Industry-Worst Corporate
Governance and the Plundering of Value by AR Global
Since RTL’s IPO in 2018, There Have Been 8
Dilutive Stock Offerings Totaling $191 Million. During the Same
Period, AR Global has Collected $498 Million in Payments from RTL
Shareholders. We Believe this Represents a Looting of Corporate
Coffers of the Highest Order.
Urges Shareholders Vote on the WHITE
Universal Proxy Card to Elect Blackwells’ Two Highly Qualified
and Independent Director Candidates
Blackwells Capital LLC (together with its affiliates
“Blackwells” or “we”), today issued a letter to fellow shareholders
regarding the urgent need for boardroom change at The Necessity
Retail REIT, Inc. (NASDAQ: RTL) (“Necessity Retail REIT” or
“RTL”).
We invite all shareholders to learn more about our case for
change and director candidates at www.StopARGlobal.com.
The full letter to shareholders has been reproduced below:
Dear fellow shareholder:
At the upcoming annual meeting of shareholders (including any
other meeting of shareholders held in lieu thereof and
adjournments, postponements, reschedulings or continuations thereof
the “Annual Meeting”), shareholders have an opportunity to halt the
ongoing destruction of value at The Necessity Retail REIT Inc.
(“RTL”). As you may know, Blackwells has been working tirelessly on
behalf of all shareholders to hold AR Global Investments, LLC (“AR
Global”) - the parent company of the ‘advisor’ and ‘property
manager’ of RTL- to account for its self-dealing and
self-enrichment, to the substantial detriment of shareholders.
We believe the case for boardroom change is clear based on the
following:
- RTL trades at a 66% discount to its Net Asset Value and 62%
discount to peers. This is due to the chokehold of its
significantly off-market management agreement with AR Global.
Since 2015, RTL has paid AR Global $498 million in fees and
expenses, while RTL shareholders have suffered a 62% stock price
decline representing $1.3 billion in total value destruction.
- Since RTL’s initial public offering in 2018, there have been
8 dilutive stock issuances at the behest of AR Global. While
shareholders have had to suffer through each of these dilutive
issuances, AR Global’s unchecked parade against RTL’s coffers has
led to annual fees and expenses increasing 3.0x during the same
period.
- We believe RTL’s board of directors (the “RTL Board”) and
management is profoundly conflicted and have enabled AR Global’s
self-dealing and corporate piracy. These entanglements include:
(i) RTL’s CEO, President and Chairman, Michael Weil who is the
founding Partner of AR Global; (ii) CFO Jason Doyle who is the
former CAO of another AR Global advised entity; and (iii) Lisa
Kabnick, the RTL Board’s “lead independent director”, who should be
acting as an independent fiduciary for RTL shareholders, yet has
profited considerably as a director on the boards of several AR
Global-managed REITs.
- Blackwells believes that RTL needs drastic corporate
governance changes. In connection with the Annual Meeting,
Blackwells has nominated two independent and highly qualified
individuals for the RTL Board, Jim Lozier and Richard O’Toole. Both
individuals bring a wealth of real estate and fiduciary experience,
along with a track record of creating value. Blackwells has also
proposed a series of advisory resolutions to bring much needed
corporate governance reform to RTL. We believe these proposals, and
our nominees, will bring integrity, intelligence and best practices
of corporate governance to RTL once and for all.
Your vote is very important. In response to Blackwells’
nominations, the RTL Board has engaged in costly litigation to
shield itself from scrutiny and suppress the voice of its
shareholders. We urge all our fellow shareholders to
vote.
Shareholders should use the WHITE Universal Proxy Card to vote
FOR all of Blackwells’ director
nominees. We are also asking you to vote FOR each of the Blackwells’ non-binding
advisory resolutions on the WHITE Universal Proxy Card.
If you have already voted on the Company’s proxy card, you have
every right to change your vote by (i) signing, dating and
returning a later dated WHITE
Universal Proxy Card, (ii) voting via the Internet, by following
the instructions on the WHITE
Universal Proxy Card or (iii) voting virtually at the Annual
Meeting.
We thank our fellow shareholders for their support and look
forward to finally putting an end to the ongoing value destruction
at RTL.
Shareholders who require assistance voting their WHITE Universal Proxy Card can contact Morrow
Sodali at 1-800-662-5200 or at Blackwells@morrowsodali.com
Sincerely,
Jason Aintabi Chief Investment Officer Blackwells Capital
About Blackwells Capital
Blackwells Capital was founded in 2016 by Jason Aintabi, its
Chief Investment Officer. Since that time, it has made investments
in public securities, engaging with management and boards, both
publicly and privately, to help unlock value for stakeholders,
including shareholders, employees and communities. Blackwells’
investments in real estate have ranged from property development
and management to REITs and adjacent real estate activities,
including financing, origination, and managing real estate backed
securities, including direct mezzanine and equity investments.
Throughout their careers, Blackwells’ principals have invested
globally on behalf of leading public and private equity firms and
have held operating roles and served on the boards of media,
energy, technology, insurance and real estate enterprises. For more
information, please visit www.blackwellscap.com.
IMPORTANT ADDITIONAL INFORMATION
Blackwells Onshore I LLC, Blackwells, Related Fund Management,
LLC, Jason Aintabi, Richard O’Toole and James L. Lozier
(collectively, the “RTL Participants”) are participants in the
solicitation of proxies from the shareholders of RTL in connection
with the 2023 annual meeting of shareholders (including any other
meeting of shareholders held in lieu thereof, and adjournments,
postponements, reschedulings or continuations thereof, the “2023
RTL Annual Meeting”). The RTL Participants have filed with the
Securities and Exchange Commission (the “SEC”) a definitive proxy
statement and accompanying WHITE universal proxy card to be
used in connection with any such solicitation of proxies from RTL’s
shareholders for the 2023 RTL Annual Meeting. BLACKWELLS STRONGLY
ADVISES ALL SHAREHOLDERS OF RTL TO READ THE DEFINITIVE PROXY
STATEMENT, THE ACCOMPANYING WHITE UNIVERSAL PROXY CARD AND
OTHER DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY THE RTL
PARTICIPANTS AS THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING
ADDITIONAL INFORMATION RELATED TO THE RTL PARTICIPANTS AND THEIR
DIRECT OR INDIRECT INTERESTS, BY SECURITY HOLDINGS OR OTHERWISE.
The definitive proxy statement and an accompanying WHITE
universal proxy card will be furnished to some or all of RTL’s
shareholders and will be, along with other relevant documents,
available at no charge on the SEC’s website at http://www.sec.gov/.
Requests for copies should be directed to Blackwells Onshore I
LLC.
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version on businesswire.com: https://www.businesswire.com/news/home/20230418006121/en/
Gagnier Communications Dan Gagnier 646-569-5897
blackwells@gagnierfc.com
Longacre Square Partners blackwells@longacresquare.com
646-386-0091
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