Burnham Pacific Properties Inc., the largest strip shopping center real estate investment trust on the West Coast, rejected an unsolicited $1.2-billion buyout offer from retailer and property investor Jay Schottenstein.
The rejection comes two weeks after Schottenstein, the chairman and majority owner of Value City Department Stores Inc., raised his bid for the San Diego-based company to $13.50 a share from $13. He also would assume debt.
Burnham officials weren't immediately available for comment, but analysts said the company's board didn't believe the bid reflected the value of all its investments, including a venture with the California Public Employees' Retirement System to buy properties and its redevelopment program.
"In the company's opinion, the case is now closed," Andrew Jones, a Morgan Stanley Dean Witter & Co. real estate analyst, said in a prepared statement. "Whether this was the right decision for shareholders will now depend on the company's ability to implement its strategic plan."
Burnham's shares were unchanged at $12.31 Monday on the New York Stock Exchange.
Schottenstein officials weren't immediately available to comment on whether it would raise its offer or launch a hostile tender offer.
Burnham owns 71 strip shopping centers, mainly in California, with 8.6 million square feet of space.