PORT WASHINGTON, NY—Cedar Realty Trust (CDR) said Monday that its board had rejected an unsolicited bid from Wheeler Real Estate Investment Trust (WHLR) to explore a possible merger. The Port Washington, NY-based shopping center REIT characterized the offer from its smaller competitor as “unrealistic.”

In a letter to WHLR chairman Jon S. Wheeler, the CDR board cited Virginia Beach, VA-based WHLR's financial performance, dividend sustainability, portfolio quality and size mismatch as factors in determining that the WHLR bid was not in the best interests of Cedar's shareholders. “Cedar is a $1.35-billion company, with a current equity market capitalization of approximately $550 million,” CDR's directors wrote. “Wheeler is a $375-million company with a current equity market capitalization of approximately $95 million.” Although “relative size differences may not matter” in some cases, in this instance they would be “adversely consequential,” according to the CDR letter.

In response, WHLR says its letter to the CDR board was “simply a request for a meeting to discuss methods to enhance shareholder value, including possible acquisition opportunities.” The correspondence did not include an offer, WHLR says. “As part of its normal operations, both Wheeler management and its board of directors will continue to review opportunities and strategies designed to increase shareholder value.”