A Stratus Properties Inc. activist shareholder criticized the company's planned conversion into a real estate investment trust and called for management and board changes at the company.
Oasis Management Co. Ltd., the manager of a fund that owns more than 13.5% of Stratus ordinary shares, said in an open letter to Stratus shareholders that the company's board has refused to hold its management accountable for its failure to execute its previously laid out five-year plan. This and other disagreements eventually led to the resignation of Oasis nominee Ella Benson from Stratus' board.
"This is the same Board and leadership team that we understand to have failed to properly engage with bids for the company at significant premiums to the stock price. In some cases, we understand the CEO did not even bring those approaches to the Board," Oasis said in the letter, adding that the board also reinstated Stratus' poison pill upon Benson's resignation.
Oasis argued, among other things, that Stratus' planned REIT conversion is a "stark departure" from its previously outlined strategy, as it effectively halts asset sales and associated shareholder returns through at least 2027.
The shareholder said Stratus should have weighed up other changes to create shareholder value, such as cost-cutting measures, which require significantly less time and financial resources than a REIT conversion.
Stratus did not respond to S&P Global Market Intelligence's request for comment as of press time.
