What started as a behind-the-scenes buyout offer has bubbled into a public war as Agree Realty Corp., a small retail REIT owning primarily single-tenant properties in 15 states, mostly in the Midwest, has spurned a third offer from privately-owned Compson Holding Corp. to acquire the REIT.

Compson Holding Corp., a 50-year-old, family-run developer and owner with a portfolio of more than 9 million square feet of office, retail and residential properties on the east coast, has spent more than three months conducting due diligence and pursuing Agree. It is also currently developing a 7-million-square-foot mixed-use project called Renaissance Commons in Boynton Beach, Fla. Compson currently owns 3.1 percent of the Agree's outstanding shares.

Originally Compson offered $34.50 per share and then $36.00 in private offers, says Michael A. Comparato President of Compson. Last Wednesday it went public with an offer for a $38.75 per share--$395.6 million--all-cash buyout. Yesterday, Agree issued a tersely-worded release rejecting the offer and saying the company is "not for sale."

Agree, which was founded by Richard Agree in 1971 and is headquartered in Farmington Hills, Mich., declined to elaborate on the release.

Compson is not ready to give up. "My response to the statement is that I think that is a breach of the board of directors duties to its shareholders to maximize shareholder value," Comparato says. "I could understand, although not agree, with a statement that the company is not for sale at $38.75, but to simply say the company is not for sale is absurd. ... Everything is for sale, it's just a matter of at what price."

Comparato says Compson is interested in Agree because it has been investing heavily in single-tenant retail assets--$225 million to date this year--and Agree's portfolio meshes with that strategy. "We've told Agree that we're open to any suggestion, anything that works for them," Comparato says. "We're pretty much indifferent to how structure the transaction. It could be a merger, acquisition or purchase of assets."

Compson’s announcement and Agree's response has led to a sudden volatility in Agree's share price. It closed at $32.17 per share last Wednesday. After hours, Compson released the information that it had been pursuing the company. Agree's stock opened at $37 per share the next morning and peaked at a 52-week-high of $37.70 per share before closing at $33.61 per share. Trading volume also jumped from 18,700 shares on May 10 to 469,700 on Thursday.

In Wednesday trading, Agree's stock was between $32.60 and $33.15 per share.

Activity has also jumped on shareholder message boards with some posters expressing exasperation at Agree's outright refusal to consider a buyout.

-- David Bodamer