CHICAGO--(BUSINESS WIRE)--
Equity Residential (NYSE: EQR) today announced it has entered into an
agreement with the owners of Archstone, a privately-held owner, operator
and developer of multifamily apartment properties, which will result in
the company receiving $150 million after exercising its option to
purchase a 26.5% interest in Archstone and Lehman Brothers Holdings Inc.
(“Lehman”) thereafter acquiring that interest under its right of first
offer (“ROFO”).
Pursuant to the agreement:
- Equity Residential has entered into a binding purchase agreement with
affiliates of Bank of America and Barclays Bank PLC (together, the
“Sellers”) to purchase their remaining 26.5% interest in Archstone for
$1.58 billion in cash.
-
Lehman, the other owner of Archstone, has exercised its ROFO right and
executed a binding purchase agreement with the Sellers to acquire this
Archstone interest for $1.58 billion. This transaction is expected to
close in approximately 15 days.
-
The parties have released each other from all claims relating to
Archstone.
-
Upon the closing of Lehman’s acquisition of this Archstone interest,
the Sellers will pay Equity Residential a break-up fee of $80 million
and Lehman will pay Equity Residential a termination fee of $70
million. If Lehman does not close, Equity Residential's contract with
the Sellers will remain in full force and effect.
-
Should Equity Residential acquire all or substantially all of
Archstone within 120 days of Lehman’s acquisition of the final 26.5%
of Archstone discussed above, under certain circumstances Equity
Residential could be required to return all or a portion of the $150
million in break-up and termination fees. While Equity Residential is
not currently in negotiations with Lehman regarding the acquisition of
Archstone, this agreement does not preclude the company from pursuing
such negotiations in the future.
Advisors
Morgan Stanley & Co. LLC served as Equity Residential’s financial
advisor and Hogan Lovells, Morrison & Foerster and Edwards Wildman as
its legal advisors on these transactions. BofA Merrill Lynch and
Barclays served as sell-side financial advisors on these transactions.
Kaye Scholer served as legal advisor to Bank of America and Simpson
Thacher & Bartlett served as legal advisor to Barclays Bank PLC.
Gleacher & Company served as Lehman’s financial advisor and Weil,
Gotshal & Manges served as its legal advisor on these transactions.
About Equity Residential
Equity Residential is an S&P 500 company focused on the acquisition,
development and management of high quality apartment properties in top
U.S. growth markets. Equity Residential owns or has investments in 427
properties located in 14 states and the District of Columbia, consisting
of 121,011 apartment units. For more information on Equity Residential,
please visit our website at www.equityapartments.com.
Forward Looking Statements
Statements in this news release, and other statements that Equity
Residential may make, including statements about the transactions
described in this release, may contain forward-looking or other
statements that involve numerous risks and uncertainties. The statements
contained in this news release that are not purely historical are
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Exchange Act
of 1934, as amended, including, without limitation, statements regarding
the management of Equity Residential’s expectations, beliefs and
intentions.All forward-looking statements included in this
communication are based on information available to Equity Residential
on the date hereof.In some cases, you can identify
forward-looking statements by terminology such as “may,” “can,” “will,”
“should,” “could,” “expects,” “plans,” “anticipates,” “intends,”
“believes,” “estimates,” “predicts,” “potential,” “targets,” “goals,”
“projects,” “outlook,” “continue,” “preliminary,” “guidance,” or
variations of such words, similar expressions, or the negative of these
terms or other comparable terminology. No assurance can be given that
any of the events anticipated by the forward-looking statements will
transpire or occur, or if any of them do so, what impact they will have
on Equity Residential’s results of operations or financial condition.Accordingly, actual results may differ materially and adversely from
those expressed in any forward-looking statements. Neither Equity
Residential nor any other person can assume responsibility for the
accuracy and completeness of forward-looking statements. There are
various important factors that could cause actual results to differ
materially from those in any such forward-looking statements, many of
which are beyond Equity Residential’s control. These factors include, at
a minimum: failure to obtain, delays in obtaining or adverse conditions
contained in any required regulatory or other approvals, failure of
Lehman to consummate its acquisition; changes in laws or regulations;
failure of the investment in the purchased interests to perform as
expected, even in the event an acquisition by Equity Residential is
consummated; inability to influence the operations and control of the
Archstone entities following consummation of the transaction; and
changes in general economic conditions. Equity Residential undertakes no
obligation (and expressly disclaims any such obligation) to publicly
update or revise any forward-looking statement, whether as a result of
new information, future events or otherwise. For additional information,
please refer to Equity Residential’s most recent Form 10-K, 10-Q and 8-K
reports filed with the SEC.
Equity Residential
Marty McKenna, (312) 928-1901
Source: Equity Residential