Imperial Rebuffs Wilshire REIT’s Acquisition Bid

Imperial Credit Commercial Mortgage Investment Corp. rejected an unsolicited bid from rival Wilshire Real Estate Investment Trust Inc.

The “proposal is inadequate and does not reflect the inherent value of [Imperial Credit] and its portfolio of assets,” the Los Angeles-based company said in a statement.

In addition, Imperial Credit adopted a “poison pill” plan, which is designed to make a takeover more expensive for a would-be acquirer, and boosted its quarterly dividend 18%.

Last week, Portland, Ore.-based Wilshire offered to buy Imperial Credit for $11.33 a share, or a total of $592 million in stock and assumed debt. Wilshire officials said it made the offer because of what it views as Imperial Credit’s difficulties in making new investments.

In rejecting the bid, Imperial said Wilshire’s “highly leveraged” assets would expose its shareholders to significant risks.

Under the poison pill plan, Imperial Credit said shareholders will get rights to buy 0.01 of a new preferred share for $40 for each common share owned. The rights can be exercised if a person or group acquires 10% of the company’s common stock.

The new 33-cent-a-share dividend, up from 28 cents, is payable Oct. 14 to shareholders of record on Sept. 30.

The shares of both companies have been hurt by troubles in the commercial mortgage business, in which low interest rates are causing an increase in prepayments.

Imperial Credit’s shares are down 21.9% this year. Wilshire, an affiliate of Wilshire Financial Services Group Inc. is down 23.4% since its April initial public offering.

In Nasdaq trading, Imperial shares rose 31 cents to close at $9.75, and Wilshire Real Estate shares rose 38 cents to $12.88.