TORONTO/NEW YORK, Feb 27 (Reuters) - Milestone Apartments Real Estate Investment Trust, which last month agreed to be acquired by Starwood Capital Group for about C$1.7 billion ($1.3 billion), has started talks with the U.S. private investment firm about raising the initial bid, people familiar with the situation told Reuters.
The move comes days after proxy advisory firm Institutional Shareholder Services issued a report recommending Milestone unitholders vote against the transaction.
Milestone and Starwood could agree on a higher price and make an announcement as soon as early this week, the sources said. But they cautioned there was no certainty a deal would be reached at a higher price, the sources added.
The sources declined to be identified as the talks are confidential. Spokesmen for both Milestone and Starwood declined to comment.
In January, Milestone agreed to be bought out by Starwood for $16.15 per Milestone unit in an all-cash transaction. The stock was unchanged at C$21.06 on Monday.
Dallas-based Milestone, which went public in Toronto in 2013, owns and manages apartment properties targeting blue-collar workers across the U.S. southeast and southwest. ($1 = 1.3095 Canadian dollars) (Reporting by John Tilak in Toronto and Carl O‘Donnell in New York; Editing by Denny Thomas and Jeffrey Benkoe)