Correspondence 0001140361-23-058186 from Lightstone Value Plus REIT II, Inc. (CIK 0001436975)
Lightstone Value Plus REIT II, Inc. (CIK 0001436975)
Date: Dec. 18, 2023 · CIK: 0001436975 · Accession: 0001140361-23-058186
AI Filing Summary & Sentiment
Letter
VIA EDGAR Office of Mergers and Acquisitions Re: Lightstone Value Plus REIT II, Inc. Schedule TO-I Filed on November 28, 2023 File No. 005-94193
Dear Ms. Chalk:
On behalf of Lightstone Value Plus REIT II, Inc. (the “Company”), set forth below are the responses to the comments of the staff (the “Staff”) in the Office of Mergers and Acquisitions in the Division of Corporate Finance of the U.S. Securities and Exchange Commission received by letter, dated December 7, 2023), to the Company’s Schedule TO-I filed on November 28, 2023 (the “Schedule TO-I”). To facilitate your review, we have set forth each of the Staff’s comments followed by the Company’s response.
All defined terms used herein have the same meaning as in your offer materials, unless otherwise indicated.
Schedule TO-I filed November 28, 2023
General
1.
We have noticed multiple discrepancies between the Offer conditions specified under the heading “What are the most significant conditions to the Offer?” in the Summary Term Sheet and Section 6 of the Offer to Purchase. For example, “materially impairs the contemplated benefits to us of the Offer” is listed as the last prong of the first condition on page 6 of the Offer to Purchase, but it omitted from that condition on page 16 of the Offer to Purchase. Please revise to consistently present the Offer conditions in these two sections.
Response:
In response to the Staff’s comment, the Company has amended the Schedule TO-I to consistently present the Offer conditions in in Summary Term Sheet and Section 6 of the Offer to Purchase. The specific revisions made to conform the conditions are discussed in response to comments 3, 4, 6, 7 and 8 and are presented on attached Exhibit A.
Christina Chalk, Esq.
Office of Mergers and Acquisitions
Securities and Exchange Commission
December 18, 2023
Page 2
2.
In light of your disclosure of the advisory agreement with the Advisor on page 21 of the Offer to Purchase, it appears that you should file that advisory agreement as an exhibit to Schedule TO. Refer to Item 12 of Schedule TO and Item 1016(d) of Regulation M-A. Please revise or advise.
Response:
In response to the Staff’s comment, the Company has amended the Schedule TO-I to file the advisory agreement between the Advisor and the Company as an exhibit.
Summary Term Sheet, page 1
3.
On page 6 of the Offer to Purchase, please describe or expand to explain what constitutes the “contemplated benefits . . . of the Offer” so that stockholders may better understand the scope of your Offer and the relevant conditions.
Response:
In response to the Staff’s comment, the Company has deleted the fifth bullet point on page 6 of the Schedule TO-I and, as a result of the deletion, inserted “or” after the semi-colon at the end of the third bullet point and deleted the word “or” at the end of the fourth bullet point on page 6. As revised, the sequence of bullet point of page 6 will read as follows:
“no threatened or pending action, suit or proceeding by any third-party, including any government or governmental, regulatory or administrative agency, authority or tribunal or by any other person, domestic, foreign or supranational, before any court, authority, agency or other tribunal shall have been instituted or shall be pending, nor shall we have received notice of any such action, that directly or indirectly:
•
challenges or seeks to challenge, makes illegal, or delays or otherwise directly or indirectly restrains, prohibits or otherwise affects our making of the Offer, the acquisition by us of some or all of the Shares pursuant to the Offer or any other matter relating to the Offer, or seeks to obtain any material damages or otherwise relates to the transactions contemplated by the Offer;
•
in our reasonable judgment, could be expected to materially and adversely affect our business, properties, assets, liabilities, capitalization, stockholders’ equity, condition (financial or otherwise), income, operations, results of operations or prospects, taken as a whole, or otherwise materially impair in any way our ability to purchase some or all of the Shares pursuant to the Offer; or
•
makes our purchase of, or payment for, some or all of the Shares pursuant to the Offer illegal, or otherwise restricts or prohibits consummation of the Offer; or
•
materially impairs the contemplated benefits to us of the Offer;”
Christina Chalk, Esq.
Office of Mergers and Acquisitions
Securities and Exchange Commission
December 18, 2023
Page 3
4.
On page 6 of the Offer to Purchase, you have included a condition that will be triggered by “any general suspension of trading in, or limitation on prices for, securities on any U.S. national securities exchange or in the over-the-counter market.” Please revise to explain what would be considered a limitation on prices for securities on any U.S. national securities exchange or in the over-the-counter market, or delete this language.
Response:
In response to the Staff’s comment, the Company has amended the Schedule TO-I to delete the phrase “or limitation on prices for” in the fourth bullet point from the bottom on page 6 of the Offer to Purchase. As revised, the bullet point will read as follows:
“any general suspension of trading in, or limitation on prices for, securities on any U.S. national securities exchange or in the over-the-counter market;”
Withdrawal Rights, page 15
5.
Refer to the following disclosure made on page 15 of the Offer to Purchase: “Stockholders may also withdraw Shares tendered at any time on or after January 21, 2024 if their Shares have not been accepted for payment before that time.” It does not appear that January 21, 2024 is the 40th business day (as defined in Rule 13e-4(a)(3)) after commencement of this Offer. Please revise or advise.
Response:
In response to the Staff’s comment, the Company has amended the Schedule TO-I to replace “January 21, 2024” with “January 30, 2024.” As revised, the first paragraph of this section will read as follows:
“Stockholders may withdraw Shares tendered at any time before 11:59 p.m. Eastern Time on the Expiration Date. We will not accept any Shares for payment before that time. Stockholders may also withdraw Shares tendered at any time on or after January 21, 2024 January 30, 2024 if their Shares have not been accepted for payment before that time.”
Conditions of the Offer, page 16
6.
On page 17 of the Offer to Purchase, you have included a condition that will be triggered by “the commencement or escalation of war, armed hostilities or other international or national calamity, including, but not limited to, an act of terrorism directly or indirectly involving the United States.” Given the current ongoing hostilities, please explain what is meant by “indirectly involving the United States” for purposes of this condition so that stockholders can better understand its scope.
Response:
In response to the Staff’s comment, the Company has amended the Schedule TO-I to add a materiality to the Company qualifier to the condition. As revised, the fourth bullet point from the top of page 17 and the second bullet point from the bottom of page 6 will read as follows:
“the commencement or escalation of war, armed hostilities or other international or national calamity, including, but not limited to, an act of terrorism directly or indirectly involving the United States that in the sole determination of the Board is material to the Company;”
Christina Chalk, Esq.
Office of Mergers and Acquisitions
Securities and Exchange Commission
December 18, 2023
Page 4
7.
Refer to the following statement made on page 18 of the Offer to Purchase: “If any of the [Offer] conditions referred to above is not satisfied, we may . . . delay acceptance for payment or payment for Shares, subject to applicable law, until satisfaction or waiver of the conditions to the Offer.” All conditions to an offer, except conditions relating to the receipt of governmental approvals necessary to consummate the offer, must be satisfied or waived as of expiration. Please revise this statement to remove the implication that you may lawfully delay acceptance for payment for reasons other than satisfying Offer conditions involving the receipt of government approvals, or advise.
Response:
In response to the Staff’s comment, the Company has amended the Schedule TO-I to delete the eighth bullet point on page 18 and to insert a new sentence regarding delay in acceptance for payment of Shares until any required governmental approval is obtained or waived. In addition, identical revisions are made on page 8 beginning with the fourth bullet point. As revised, the following sentence will be inserted after the bullet point series on pages 8 and 17:
“In addition, we may delay acceptance for payment or payment for Shares until any approval, permit, authorization, favorable review or consent of any governmental entity required to be obtained in connection with the Offer is obtained on terms satisfactory to us in our reasonable discretion.”
8.
Refer to the following sentence in the last paragraph of this section on page 18 of the Offer to Purchase: “Our failure to timely to [sic] exercise any of the foregoing rights may be deemed a waiver of that right.” If a bidder waives an offer condition, it must do so promptly and with timely notice of the waiver to target security holders; it should not, consistent with its obligation to inform target security holders of changes to the terms of the offer, seek to waive an offer condition by failing to timely assert it. Please confirm your understanding in your response letter.
Response:
In response the Staff’s comment, the Company acknowledges that if it waives an offer condition, it must do so promptly and with timely notice to its stockholders. The Company has amended the above-described sentence on page 18 of the Offer to Purchase to read as follows:
“Our failure to timely at any time to exercise any of the foregoing rights may be deemed a waiver of that right.
Conditions of the Offer, page 16
9.
Please revise this section to explain how the Company set the Offer price at $6.00 per Share, other than simply reflecting a premium to the West 4 Offer price. If the Company considered trading prices of the Shares in the secondary markets in setting the Offer price, please revise accordingly. If it did not consider secondary market trading prices, expand to explain why it did not do so.
Response:
The Company’s Shares are not currently listed on a national securities exchange and as a result, there is no active trading market for its Shares and they are illiquid. According to MarketWatch.com, the last quote was $2.60 per Share on February 9, 2021. SeekingAlpha.com lists the last quote in the grey market of $2.60 per Share on August 18, 2023. Dividend.com lists the last price as $2.90 per Share as of August 22, 2023. According to West 4’s Offer to Purchase, “[f]or the period between June 7, 2023 and September 7, 2023, CTT Auctions, an affiliate of CTT, reported secondary market trading prices ranging from $4.41 to $5.67 for shares of the [Company’s] common stock.” As all of these quotes or sales prices are below both the West 4’s offer price and the Company’s Offer price and well below the most recently published estimated NAV per Share of $10.12, the Board did not take the quotes and sales prices into consideration in determining the Offer price.
Further, the Company also notes that because its and West 4’s offer prices are both well below the most recently published estimated NAV per Share, the Company’s board of directors has recommended that stockholders do not tender their Shares in either the Company’s Offer or the lower West 4 offer.
Christina Chalk, Esq.
Office of Mergers and Acquisitions
Securities and Exchange Commission
December 18, 2023
Page 5
The Company acknowledges that it is responsible for the accuracy and adequacy of its disclosures, notwithstanding any review, comments, action or absence of action by the Staff.
If you should have further questions or require additional information, please do not hesitate to call the undersigned directly at 848.340.3949.
Very truly yours,
/s/ Terri Warren Reynolds
Show Raw Text
CORRESP
1
filename1.htm
1985 Cedar Bridge Avenue
Suite 1
Lakewood, NJ 08701
Terri Warren Reynolds
treynolds@lightstonegroup.com
M 848.240.3949
December 18, 2023
VIA EDGAR
Christina Chalk, Esq.
Special Counsel
Office of Mergers and Acquisitions
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re:
Lightstone Value Plus REIT II, Inc.
Schedule TO-I Filed on November 28, 2023
File No. 005-94193
Dear Ms. Chalk:
On behalf of Lightstone Value Plus REIT II, Inc. (the “Company”), set forth below are the responses to the comments of the staff (the “Staff”) in the Office of Mergers and Acquisitions in the Division of Corporate Finance of the U.S. Securities
and Exchange Commission received by letter, dated December 7, 2023), to the Company’s Schedule TO-I filed on November 28, 2023 (the “Schedule TO-I”). To facilitate your review, we have set forth each of the Staff’s comments followed by the
Company’s response.
All defined terms used herein have the same meaning as in your offer materials, unless otherwise indicated.
Schedule TO-I filed November 28, 2023
General
1.
We have noticed multiple discrepancies between the Offer conditions specified under the heading “What are the most significant conditions to the Offer?” in the Summary Term Sheet and Section 6 of the Offer to
Purchase. For example, “materially impairs the contemplated benefits to us of the Offer” is listed as the last prong of the first condition on page 6 of the Offer to Purchase, but it omitted from that condition on page 16 of the Offer to
Purchase. Please revise to consistently present the Offer conditions in these two sections.
Response:
In response to the Staff’s comment, the Company has amended the Schedule TO-I to consistently present the Offer conditions in in Summary Term Sheet and Section 6 of the Offer to Purchase. The specific revisions made
to conform the conditions are discussed in response to comments 3, 4, 6, 7 and 8 and are presented on attached Exhibit A.
Christina Chalk, Esq.
Office of Mergers and Acquisitions
Securities and Exchange Commission
December 18, 2023
Page 2
2.
In light of your disclosure of the advisory agreement with the Advisor on page 21 of the Offer to Purchase, it appears that you should file that advisory agreement as an exhibit to Schedule TO. Refer to Item
12 of Schedule TO and Item 1016(d) of Regulation M-A. Please revise or advise.
Response:
In response to the Staff’s comment, the Company has amended the Schedule TO-I to file the advisory agreement between the Advisor and the Company as an exhibit.
Summary Term Sheet, page 1
3.
On page 6 of the Offer to Purchase, please describe or expand to explain what constitutes the “contemplated benefits . . . of the Offer” so that stockholders may better understand the scope of your Offer and
the relevant conditions.
Response:
In response to the Staff’s comment, the Company has deleted the fifth bullet point on page 6 of the Schedule TO-I and, as a result of the deletion, inserted “or” after the semi-colon at the end of the third bullet
point and deleted the word “or” at the end of the fourth bullet point on page 6. As revised, the sequence of bullet point of page 6 will read as follows:
“no threatened or pending action, suit or proceeding by any third-party, including any government or governmental, regulatory or administrative agency, authority or tribunal or by any other person, domestic, foreign or
supranational, before any court, authority, agency or other tribunal shall have been instituted or shall be pending, nor shall we have received notice of any such action, that directly or indirectly:
•
challenges or seeks to challenge, makes illegal, or delays or otherwise directly or indirectly restrains, prohibits or otherwise affects our making of the Offer, the acquisition by us of some or all of the Shares pursuant to the Offer or
any other matter relating to the Offer, or seeks to obtain any material damages or otherwise relates to the transactions contemplated by the Offer;
•
in our reasonable judgment, could be expected to materially and adversely affect our business, properties, assets, liabilities, capitalization, stockholders’ equity, condition (financial or otherwise), income, operations, results of
operations or prospects, taken as a whole, or otherwise materially impair in any way our ability to purchase some or all of the Shares pursuant to the Offer; or
•
makes our purchase of, or payment for, some or all of the Shares pursuant to the Offer illegal, or otherwise restricts or prohibits consummation of the Offer; or
•
materially impairs the contemplated benefits to us of the Offer;”
Christina Chalk, Esq.
Office of Mergers and Acquisitions
Securities and Exchange Commission
December 18, 2023
Page 3
4.
On page 6 of the Offer to Purchase, you have included a condition that will be triggered by “any general suspension of trading in, or limitation on prices for, securities on any U.S. national securities
exchange or in the over-the-counter market.” Please revise to explain what would be considered a limitation on prices for securities on any U.S. national securities exchange or in the over-the-counter market, or delete this language.
Response:
In response to the Staff’s comment, the Company has amended the Schedule TO-I to delete the phrase “or limitation on prices for” in the fourth bullet point from the bottom on page 6 of the Offer to Purchase. As
revised, the bullet point will read as follows:
“any general suspension of trading in, or limitation on prices for, securities on any U.S. national securities exchange or in the over-the-counter market;”
Withdrawal Rights, page 15
5.
Refer to the following disclosure made on page 15 of the Offer to Purchase: “Stockholders may also withdraw Shares tendered at any time on or after January 21, 2024 if their Shares have not been accepted for
payment before that time.” It does not appear that January 21, 2024 is the 40th business day (as defined in Rule 13e-4(a)(3)) after commencement of this Offer. Please revise or advise.
Response:
In response to the Staff’s comment, the Company has amended the Schedule TO-I to replace “January 21, 2024” with “January 30, 2024.” As revised, the first paragraph of this section will read as follows:
“Stockholders may withdraw Shares tendered at any time before 11:59 p.m. Eastern Time on the Expiration Date. We will not accept any Shares for payment before that time. Stockholders may also withdraw Shares tendered
at any time on or after January 21, 2024 January 30, 2024 if their Shares have not been accepted for payment before that time.”
Conditions of the Offer, page 16
6.
On page 17 of the Offer to Purchase, you have included a condition that will be triggered by “the commencement or escalation of war, armed hostilities or other international or national calamity, including,
but not limited to, an act of terrorism directly or indirectly involving the United States.” Given the current ongoing hostilities, please explain what is meant by “indirectly involving the United States” for purposes of this condition so
that stockholders can better understand its scope.
Response:
In response to the Staff’s comment, the Company has amended the Schedule TO-I to add a materiality to the Company qualifier to the condition. As revised, the fourth bullet point from the top of page 17 and the second
bullet point from the bottom of page 6 will read as follows:
“the commencement or escalation of war, armed hostilities or other international or national calamity, including, but not limited to, an act of terrorism directly or indirectly involving the United States that in the sole determination of the Board is material to the Company;”
Christina Chalk, Esq.
Office of Mergers and Acquisitions
Securities and Exchange Commission
December 18, 2023
Page 4
7.
Refer to the following statement made on page 18 of the Offer to Purchase: “If any of the [Offer] conditions referred to above is not satisfied, we may . . . delay acceptance for payment or payment for Shares,
subject to applicable law, until satisfaction or waiver of the conditions to the Offer.” All conditions to an offer, except conditions relating to the receipt of governmental approvals necessary to consummate the offer, must be satisfied or
waived as of expiration. Please revise this statement to remove the implication that you may lawfully delay acceptance for payment for reasons other than satisfying Offer conditions involving the receipt of government approvals, or advise.
Response:
In response to the Staff’s comment, the Company has amended the Schedule TO-I to delete the eighth bullet point on page 18 and to insert a new sentence regarding delay in acceptance for payment of Shares until any
required governmental approval is obtained or waived. In addition, identical revisions are made on page 8 beginning with the fourth bullet point. As revised, the following sentence will be inserted after the bullet point series on pages 8 and 17:
“In addition, we may delay acceptance for payment or payment for Shares until any approval, permit, authorization, favorable review or consent of any governmental entity required to be obtained in connection with the
Offer is obtained on terms satisfactory to us in our reasonable discretion.”
8.
Refer to the following sentence in the last paragraph of this section on page 18 of the Offer to Purchase: “Our failure to timely to [sic] exercise any of the foregoing rights may be deemed a waiver of that
right.” If a bidder waives an offer condition, it must do so promptly and with timely notice of the waiver to target security holders; it should not, consistent with its obligation to inform target security holders of changes to the terms
of the offer, seek to waive an offer condition by failing to timely assert it. Please confirm your understanding in your response letter.
Response:
In response the Staff’s comment, the Company acknowledges that if it waives an offer condition, it must do so promptly and with timely notice to its stockholders. The Company has amended the above-described sentence
on page 18 of the Offer to Purchase to read as follows:
“Our failure to timely at any time to exercise any of the foregoing rights may be deemed a waiver of that right.
Conditions of the Offer, page 16
9.
Please revise this section to explain how the Company set the Offer price at $6.00 per Share, other than simply reflecting a premium to the West 4 Offer price. If the Company considered trading prices of the
Shares in the secondary markets in setting the Offer price, please revise accordingly. If it did not consider secondary market trading prices, expand to explain why it did not do so.
Response:
The Company’s Shares are not currently listed on a national securities exchange and as a result, there is no active trading market for its Shares and they are illiquid. According to MarketWatch.com, the last quote was
$2.60 per Share on February 9, 2021. SeekingAlpha.com lists the last quote in the grey market of $2.60 per Share on August 18, 2023. Dividend.com lists the last price as $2.90 per Share as of August 22, 2023. According to West 4’s Offer to
Purchase, “[f]or the period between June 7, 2023 and September 7, 2023, CTT Auctions, an affiliate of CTT, reported secondary market trading prices ranging from $4.41 to $5.67 for shares of the [Company’s] common stock.” As all of these quotes or
sales prices are below both the West 4’s offer price and the Company’s Offer price and well below the most recently published estimated NAV per Share of $10.12, the Board did not take the quotes and sales prices into consideration in determining
the Offer price.
Further, the Company also notes that because its and West 4’s offer prices are both well below the most recently published estimated NAV per Share, the Company’s board of directors has recommended that stockholders do
not tender their Shares in either the Company’s Offer or the lower West 4 offer.
Christina Chalk, Esq.
Office of Mergers and Acquisitions
Securities and Exchange Commission
December 18, 2023
Page 5
The Company acknowledges that it is responsible for the accuracy and adequacy of its disclosures, notwithstanding any review, comments, action or absence of action by the Staff.
If you should have further questions or require additional information, please do not hesitate to call the undersigned directly at 848.340.3949.
Very truly yours,
/s/ Terri Warren Reynolds
Terri Warren Reynolds
cc:
Joseph E. Teichman (Lightstone)
Shane Callaghan (SEC Office of Mergers and Acquisitions)
Eddie Kim (SEC Office of Mergers and Acquisitions)