Sizeler Property Investors, Inc. (NYSE:SIZ) announced on August 21st that had entered into a merger agreement with Revenue Properties Co. (TO:RPC) in which each share of Sizeler common stock outstanding at the time of the merger will be exchanged for $15.10 in cash. Two days ago, a different company - Compson Holding Corp - announced that it would raise its bid from $15.50 to $16.10. After a day without response from the company, shareholders are calling for the company to at least review the competing bid. Opportunity Investors - a hedge fund holding over 6% of the company - also issued a letter, in a 13D filing with the SEC, to the board, bringing up another key issue: management's relationship with Revenue Properties Co. The concern stems as a result of management's relationship to Revenue Properties Co.:

"As you know, we have significant concerns with respect to how Sizeler handled the auction process for the Company. The conflicts of interests between you, as Chairman of Sizeler, and Revenue Properties Company Limited and Morgaurd Corporation are particularly disturbing. The Compson offer now provides you with the opportunity to put to rest the question of whether or not the process was indeed fair and designed to maximize value for all Sizeler shareholders, not just Revenue Properties."

As a result, the hedge fund demanded that the board consider other options:

"In light of the superior all cash offer proposed by Compson we call on the board to immediately enter into discussions with Compson or any other interested party that may be willing to offer a premium to the current $15.10 per share offer. In addition, given the attractiveness of the Compson proposal, we call on the board to reconsider liquidation as a means to maximize value for all Sizeler shareholders."

This conflict of interest will likely force the board to at least consider the Compson bid, which is more than 6% higher than the current market price. This course of action could result in a bidding war or the abandonment of the sale. Either way, this stock is worth keeping an eye on - with the price sitting at around $15.09, any competing bids would likely come at a substancial premium.

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