RECOMMENDATION TO REJECT AN UNSOLICITED OFFER
If you are considering selling your shares to Comrit Investments 1, Limited Partnership or its affiliates, please read all of the information below.
The Board of Directors (the “Board”) of SmartStop Self Storage REIT, Inc. (the “Company”) unanimously recommends that you IGNORE the materials that were sent to you by Comrit Investments 1, Limited Partnership and its affiliates (“Comrit”) and REJECT its offer.
Please keep reading for important information.
We recently became aware of an unsolicited attempt by Comrit in which Comrit has proposed to acquire up to 211,020 shares of Class A common stock and 23,447 shares of Class T common stock of the Company at a price of $8.53 per share (collectively, the “Comrit Tender Offer”). After careful evaluation, the Board unanimously recommends that you reject the Comrit Tender Offer and ignore the materials that were sent to you by Comrit.
The following are a list of important considerations:
• As admitted by Comrit, it is “making the [Comrit Tender Offer] for investment purposes and with the intention of making a profit” (emphasis added). Comrit is a for profit business that, among other things, capitalizes on the illiquidity of shares by buying shares at what Comrit believes is a discounted price in order to make a profit. The Comrit Tender Offer indicates that Comrit believes that our shares will be worth more than its offer price in the future. Neither we nor any of our affiliates is in any way affiliated with Comrit.
º If the offer is for less than 5% of a company’s shares, it is a “mini-tender offer” and “you should proceed with caution.” The Comrit Tender Offer is for up to approximately 0.7% of the total number of the Company’s outstanding common stock as of November 11, 2020. Thus, the Comrit Tender Offer is a mini-tender offer, and you should proceed with caution.
º “Some bidders make mini-tender offers at below-market prices, hoping that they will catch investors off guard.”
º “[I]nvestors typically feel pressured to tender their shares quickly without having solid information about the offer or the people behind it. And they’ve been shocked to learn that they generally cannot withdraw from mini-tender offers.”
º “[M]ini-tender offers typically do not provide the same disclosure and procedural protections that larger, traditional tender offers provide.” We believe the materials provided along with the Comrit Tender Offer fail to adequately address certain matters, such as: a complete description of the risks associated with the Comrit Tender Offer; a clear discussion of the methodologies used by Comrit to determine its offer price or how it has valued the Company’s shares; and a complete disclosure as to the financial wherewithal of Comrit.
While we do not believe the Comrit Tender Offer is in the best interest of our stockholders, it is important for you to carefully evaluate whether to tender your shares as it relates to your specific situation, particularly with respect to your investment objectives, your financial circumstances, other financial opportunities available to you, your own tax position and tax consequences, and any other factors you determine are relevant to your decision. To that end, we encourage you to consult with any financial, tax or other advisors when making your decision.
Please also carefully consider all the factors discussed in the Comrit Tender Offer materials, our letter and the advice provided by the SEC before making a decision.
We encourage you to follow the recommendation of the Board and not tender your shares in connection with the Comrit Tender Offer.
If you do not wish to tender your shares, simply IGNORE the Comrit Tender Offer materials and DO NOT RESPOND.
Should you have any questions or need further information about your options, the Comrit Tender Offer, or otherwise, please feel free to contact SmartStop Self Storage REIT, Inc., 10 Terrace Road, Ladera Ranch, California 92694, Attention: Investor Relations (telephone number: (866) 418-5144).
H. Michael Schwartz
Chief Executive Officer
Blue Vault helps me to stay well informed on the financial status of both open and closed nontraded REITs and BDCs, so that I can help my clients better understand the product, before they make the decision to invest and after.