Five Mile to tender for Prime Group Realty 9% preferreds after merger

By Susanna Moon

Chicago, Oct. 11 - Prime Group Realty Trust said that Five Mile Capital Partners LLC will begin a tender offer for Prime Group's 9% series B cumulative redeemable preferred shares.

The purchase price will be at least $5.00 per share in cash, which is premium of about 86% over the high end of the valuation range of the peferreds at $2.69 per share by financial adviser Duff & Phelps, LLC, according to a Prime Group press release.

The tender offer will begin within 30 days of the close of the sale of Prime Group's common shares to Five Mile for $625,000 under a merger agreement.

Settlement of the stock purchase offer is expected to occur on Nov. 1.

The purchase price is a premium of about 32% over the closing price of the preferreds on the trading day before the execution of the stock purchase agreement, according to Jeffrey A. Patterson, Prime Group's president and chief executive officer, in a news release.

"The series B shares have been thinly traded and we are happy to provide a cash offer that allows each holder to receive this price," Patterson said.

Prime Group announced the possible merger with an affiliate of Five Mile on April 5.

Prime Group is a real estate investment trust that owns office and industrial real estate in Chicago. Five Mile Capital Partners is a privately held alternative investment and asset management company based in Stamford, Conn.

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