Equity Office (NYSE:EOP)
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Equity Office Properties Trust (NYSE:EOP) today announced that it has
signed a definitive merger agreement to be acquired by Blackstone Real
Estate Partners, an affiliate of The Blackstone Group, in a transaction
valued at approximately $36 billion.
Under the terms of the agreement, Blackstone will acquire all of the
outstanding common stock of Equity Office for $48.50 per share in cash.
The purchase price per share represents an 8.5% premium over Equity
Office’s closing share price on November 17,
2006, and a 20.5% premium over the company’s
three-month average closing price. Equity Office intends to pay its
regular quarterly common share dividend for the quarter ending December
31, 2006, but, under the terms of the agreement, not for any quarter
thereafter.
Equity Office’s Board of Trustees has
unanimously approved the merger agreement and has recommended the
approval of the transaction by Equity Office’s
common shareholders. Completion of the transaction, which is currently
expected to occur in the first quarter of 2007, is contingent upon
customary closing conditions and the approval of Equity Office’s
shareholders, who will be asked to vote on the proposed transaction at a
special meeting that will be held on a date to be announced. The
transaction is not contingent on receipt of financing by Blackstone.
Neither Management nor the Trustees of Equity Office are participants in
the buying group.
Blackstone has agreed that, as promptly as practicable after the
completion of the merger, it will liquidate the surviving corporation in
the merger into a Blackstone affiliate. In the liquidation, each holder
of a share of the 5.25% Series B Cumulative Preferred Stock will receive
$50.00 per share in cash plus any then accumulated but unpaid dividends,
and each holder of a share of the 7.75% Series G Cumulative Redeemable
Preferred Stock will receive $25.00 per share in cash plus any then
accumulated but unpaid dividends.
The common limited partnership interests in Equity Office’s
operating partnership will be acquired for $48.50 per unit in cash.
Qualified holders of common limited partnership interests will be given
the option (in lieu of cash) to elect to receive preferred units of
limited partnership interest in the partnership following the merger.
It is expected that tender offers and consent solicitations will be made
with respect to the company’s unsecured
non-exchangeable debt securities except for certain redeemable issues
with small outstanding principal amounts, which are expected to be
redeemed.
“We’ve built a
great company -- epitomized by the caliber of our employees, the quality
of our assets and the markets where we operate,”
said Richard Kincaid, president and CEO of Equity Office. “Our
ultimate goal has always been to maximize shareholder value, and we
believe we have done that through this transaction with The Blackstone
Group, one of the world’s premier private
equity firms. The value created by this transaction reflects the hard
work and dedication of our employees who have driven our success over
the past 10 years.”
“We are extremely excited about this landmark
transaction with Equity Office, which represents the largest private
equity deal in history,” said Jonathan D.
Gray, senior managing director of The Blackstone Group. “We
believe that the skills and strengths of Equity Office will greatly
enhance our existing office platform, which has been expanded through
our recent acquisitions of CarrAmerica and Trizec.”
Merrill Lynch & Co. acted as exclusive financial advisor to Equity
Office. Goldman, Sachs & Co., Bank of America, Bear Stearns, Blackstone
Corporate Advisory and Morgan Stanley acted as financial advisors to
Blackstone. Acquisition financing will be led by Goldman, Sachs & Co.,
Bank of America, and Bear Stearns. Sidley Austin LLP acted as legal
advisor to Equity Office. Simpson Thacher & Bartlett LLP acted as legal
advisor to Blackstone.
About Equity Office
Equity Office Properties Trust, operating through its various
subsidiaries and affiliates, is the nation’s
largest publicly held office building owner and manager with a total
office portfolio consisting of whole or partial interests in 580
buildings comprising 108.6 million square feet in 16 states and the
District of Columbia. Equity Office has an ownership presence in 24
Metropolitan Statistical Areas (MSAs) and in 100 submarkets, enabling it
to provide a wide range of office solutions for local, regional and
national customers. For more company information visit the Equity Office
website at http://www.equityoffice.com.
About The Blackstone Group
The Blackstone Group, a global private investment and advisory firm, was
founded in 1985. The firm has raised a total of more then $67 billion
for alternative asset investing of which almost $13 billion has been for
real estate investing. The firm has a long track record of investing in
office buildings, hotels and other commercial properties. The Real
Estate Group has approximately 40 experienced professionals who have a
deep understanding of real estate across all product classes and
geographic areas. In addition to Real Estate, The Blackstone Group's
core businesses include Private Equity Investing, Corporate Debt
Investing, Hedge Funds, Mutual Fund Management, Private Placement,
Marketable Alternative Asset Management, and Investment Banking Advisory
Services. Further information is available at http://www.blackstone.com.
Forward-Looking Statements
This press release contains certain forward-looking statements based on
current Equity Office management expectations. Those forward-looking
statements include all statements other than those made solely with
respect to historical fact. Numerous risks, uncertainties and other
factors may cause actual results to differ materially from those
expressed in any forward-looking statements. These factors include, but
are not limited to, (1) the occurrence of any event, change or other
circumstances that could give rise to the termination of the merger
agreement; (2) the outcome of any legal proceedings that may be
instituted against Equity Office and others following announcement of
the merger agreement; (3) the inability to complete the merger due to
the failure to obtain shareholder approval or the failure to satisfy
other conditions to completion of the merger, including the receipt of
shareholder approval and the expiration of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976; (4) the failure to
obtain the necessary debt financing arrangements set forth in commitment
letters received in connection with the merger; (5) risks that the
proposed transaction disrupts current plans and operations and the
potential difficulties in employee retention as a result of the merger;
(6) the ability to recognize the benefits of the merger; (7) the amount
of the costs, fees, expenses and charges related to the merger and the
actual terms of certain financings that will be obtained for the merger;
and (8) the impact of the substantial indebtedness incurred to finance
the consummation of the merger; and other risks that are set forth in
the “Risk Factors,”
“Legal Proceedings”
and “Management Discussion and Analysis of
Results of Operations and Financial Condition”
sections of Equity Office’s SEC filings. Many
of the factors that will determine the outcome of the subject matter of
this press release are beyond Equity Office’s
ability to control or predict. Equity Office undertakes no obligation to
revise or update any forward-looking statements, or to make any other
forward-looking statements, whether as a result of new information,
future events or otherwise.
Additional Information About the Merger and Where to Find It
In connection with this proposed transaction, the company will file a
proxy statement with the Securities and Exchange Commission (SEC).
SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT FILED WITH THE SEC
CAREFULLY AND IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE BECAUSE IT WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final
proxy statement will be mailed to the company’s
shareholders. In addition, shareholders will be able to obtain the proxy
statement and all other relevant documents filed by the company with the
SEC free of charge at the SEC’s Web site www.sec.gov
or from Equity Office Properties Trust, Investor Relations at Two North
Riverside Plaza, Suite 2100, Chicago, Illinois, 60606, (312) 466-3300.
Participants in the Solicitation
The company’s trustees, executive officers
and other members of management and employees may be deemed to be
participants in the solicitation of proxies from the shareholders of the
company in favor of the proposed transaction. Information about the
company and its trustees and executive officers, and their ownership of
the company’s securities, is set forth in the
proxy statement for the 2006 Annual Meeting of Shareholders of the
Company, which was filed with the SEC on April 17, 2006. Additional
information regarding the interests of those persons may be obtained by
reading the proxy statement when it becomes available.
Equity Office Properties Trust (NYSE:EOP) today announced that it
has signed a definitive merger agreement to be acquired by Blackstone
Real Estate Partners, an affiliate of The Blackstone Group, in a
transaction valued at approximately $36 billion.
Under the terms of the agreement, Blackstone will acquire all of
the outstanding common stock of Equity Office for $48.50 per share in
cash. The purchase price per share represents an 8.5% premium over
Equity Office's closing share price on November 17, 2006, and a 20.5%
premium over the company's three-month average closing price. Equity
Office intends to pay its regular quarterly common share dividend for
the quarter ending December 31, 2006, but, under the terms of the
agreement, not for any quarter thereafter.
Equity Office's Board of Trustees has unanimously approved the
merger agreement and has recommended the approval of the transaction
by Equity Office's common shareholders. Completion of the transaction,
which is currently expected to occur in the first quarter of 2007, is
contingent upon customary closing conditions and the approval of
Equity Office's shareholders, who will be asked to vote on the
proposed transaction at a special meeting that will be held on a date
to be announced. The transaction is not contingent on receipt of
financing by Blackstone. Neither Management nor the Trustees of Equity
Office are participants in the buying group.
Blackstone has agreed that, as promptly as practicable after the
completion of the merger, it will liquidate the surviving corporation
in the merger into a Blackstone affiliate. In the liquidation, each
holder of a share of the 5.25% Series B Cumulative Preferred Stock
will receive $50.00 per share in cash plus any then accumulated but
unpaid dividends, and each holder of a share of the 7.75% Series G
Cumulative Redeemable Preferred Stock will receive $25.00 per share in
cash plus any then accumulated but unpaid dividends.
The common limited partnership interests in Equity Office's
operating partnership will be acquired for $48.50 per unit in cash.
Qualified holders of common limited partnership interests will be
given the option (in lieu of cash) to elect to receive preferred units
of limited partnership interest in the partnership following the
merger.
It is expected that tender offers and consent solicitations will
be made with respect to the company's unsecured non-exchangeable debt
securities except for certain redeemable issues with small outstanding
principal amounts, which are expected to be redeemed.
"We've built a great company -- epitomized by the caliber of our
employees, the quality of our assets and the markets where we
operate," said Richard Kincaid, president and CEO of Equity Office.
"Our ultimate goal has always been to maximize shareholder value, and
we believe we have done that through this transaction with The
Blackstone Group, one of the world's premier private equity firms. The
value created by this transaction reflects the hard work and
dedication of our employees who have driven our success over the past
10 years."
"We are extremely excited about this landmark transaction with
Equity Office, which represents the largest private equity deal in
history," said Jonathan D. Gray, senior managing director of The
Blackstone Group. "We believe that the skills and strengths of Equity
Office will greatly enhance our existing office platform, which has
been expanded through our recent acquisitions of CarrAmerica and
Trizec."
Merrill Lynch & Co. acted as exclusive financial advisor to Equity
Office. Goldman, Sachs & Co., Bank of America, Bear Stearns,
Blackstone Corporate Advisory and Morgan Stanley acted as financial
advisors to Blackstone. Acquisition financing will be led by Goldman,
Sachs & Co., Bank of America, and Bear Stearns. Sidley Austin LLP
acted as legal advisor to Equity Office. Simpson Thacher & Bartlett
LLP acted as legal advisor to Blackstone.
About Equity Office
Equity Office Properties Trust, operating through its various
subsidiaries and affiliates, is the nation's largest publicly held
office building owner and manager with a total office portfolio
consisting of whole or partial interests in 580 buildings comprising
108.6 million square feet in 16 states and the District of Columbia.
Equity Office has an ownership presence in 24 Metropolitan Statistical
Areas (MSAs) and in 100 submarkets, enabling it to provide a wide
range of office solutions for local, regional and national customers.
For more company information visit the Equity Office website at
http://www.equityoffice.com.
About The Blackstone Group
The Blackstone Group, a global private investment and advisory
firm, was founded in 1985. The firm has raised a total of more then
$67 billion for alternative asset investing of which almost $13
billion has been for real estate investing. The firm has a long track
record of investing in office buildings, hotels and other commercial
properties. The Real Estate Group has approximately 40 experienced
professionals who have a deep understanding of real estate across all
product classes and geographic areas. In addition to Real Estate, The
Blackstone Group's core businesses include Private Equity Investing,
Corporate Debt Investing, Hedge Funds, Mutual Fund Management, Private
Placement, Marketable Alternative Asset Management, and Investment
Banking Advisory Services. Further information is available at
http://www.blackstone.com.
Forward-Looking Statements
This press release contains certain forward-looking statements
based on current Equity Office management expectations. Those
forward-looking statements include all statements other than those
made solely with respect to historical fact. Numerous risks,
uncertainties and other factors may cause actual results to differ
materially from those expressed in any forward-looking statements.
These factors include, but are not limited to, (1) the occurrence of
any event, change or other circumstances that could give rise to the
termination of the merger agreement; (2) the outcome of any legal
proceedings that may be instituted against Equity Office and others
following announcement of the merger agreement; (3) the inability to
complete the merger due to the failure to obtain shareholder approval
or the failure to satisfy other conditions to completion of the
merger, including the receipt of shareholder approval and the
expiration of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976; (4) the failure to obtain the necessary debt
financing arrangements set forth in commitment letters received in
connection with the merger; (5) risks that the proposed transaction
disrupts current plans and operations and the potential difficulties
in employee retention as a result of the merger; (6) the ability to
recognize the benefits of the merger; (7) the amount of the costs,
fees, expenses and charges related to the merger and the actual terms
of certain financings that will be obtained for the merger; and (8)
the impact of the substantial indebtedness incurred to finance the
consummation of the merger; and other risks that are set forth in the
"Risk Factors," "Legal Proceedings" and "Management Discussion and
Analysis of Results of Operations and Financial Condition" sections of
Equity Office's SEC filings. Many of the factors that will determine
the outcome of the subject matter of this press release are beyond
Equity Office's ability to control or predict. Equity Office
undertakes no obligation to revise or update any forward-looking
statements, or to make any other forward-looking statements, whether
as a result of new information, future events or otherwise.
Additional Information About the Merger and Where to Find It
In connection with this proposed transaction, the company will
file a proxy statement with the Securities and Exchange Commission
(SEC). SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT FILED WITH
THE SEC CAREFULLY AND IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE
BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION. The final proxy statement will be mailed to the company's
shareholders. In addition, shareholders will be able to obtain the
proxy statement and all other relevant documents filed by the company
with the SEC free of charge at the SEC's Web site www.sec.gov or from
Equity Office Properties Trust, Investor Relations at Two North
Riverside Plaza, Suite 2100, Chicago, Illinois, 60606, (312) 466-3300.
Participants in the Solicitation
The company's trustees, executive officers and other members of
management and employees may be deemed to be participants in the
solicitation of proxies from the shareholders of the company in favor
of the proposed transaction. Information about the company and its
trustees and executive officers, and their ownership of the company's
securities, is set forth in the proxy statement for the 2006 Annual
Meeting of Shareholders of the Company, which was filed with the SEC
on April 17, 2006. Additional information regarding the interests of
those persons may be obtained by reading the proxy statement when it
becomes available.