By Lisa Kerner
Charlotte, N.C., May 29 - Archstone-Smith agreed to be acquired by a partnership led by Tishman Speyer and Lehman Brothers for $60.75 per share in cash, or $22.2 billion, including the assumption and refinancing of outstanding debt. Archstone-Smith's board has approved the deal, which is expected to close in the third quarter.
The transaction represents the largest public-to-private merger and acquisition transaction in the multifamily real estate investment trust sector, a company news release stated.
Archstone-Smith will pay its regular quarterly dividend for the last time on May 31. In connection with the merger, Archstone-Smith's series I preferred shares will either be redeemed at the liquidation preference of $100,000 per share or be converted into preferred shares of the surviving entity in the merger, at the election of the partnership.
Unitholders of Archstone-Smith Operating Trust, the operating entity through which Archstone-Smith conducts its business, can elect to receive $60.75 per unit in cash or a newly issued preferred unit in Archstone-Smith Operating Trust.
"We have always been committed to maximizing value for our shareholders, and we believe this merger accomplishes that objective, offering a significant premium over the unaffected share price," Archstone-Smith chairman and chief executive officer R. Scot Sellers said in the release.
The transaction is being financed by equity from Tishman Speyer and with debt and equity capital arranged by Lehman Brothers Inc. and Bank of America.
Archstone-Smith was advised by Morgan Stanley and Hogan & Hartson LLP. The Englewood, Colo.-based real estate investment trust develops and operates apartment communities in the United States.
Tishman Speyer acquires and develops real estate worldwide.
| Acquirer: | Tishman Speyer and Lehman Brothers partnership
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| Target: | Archstone-Smith
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| Transaction value: | $22.2 billion
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| Price per share: | $60.75
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| Announcement date: | May 29
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| Expected closing: | Third quarter
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| Stock price for target: | NYSE: ASN: $55.23 on May 25
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