Prime Group Realty Trust to seek preferred holder OK to be acquired

By Angela McDaniels

Tacoma, Wash., Feb. 14 - Prime Group Realty Trust will seek approval from the holders of its 9% series B cumulative redeemable preferred shares of beneficial interest to be acquired by Five Mile Capital Partners LLC, according to a company news release.

Five Mile plans to acquire the company for $5 in cash per share of preferred beneficial interest. There are currently no common shares of beneficial interest of the company outstanding.

The closing of the merger agreement is subject to the approval by at least two-thirds of the holders of the preferreds. The transaction is not subject to any financing condition.

Following the completion of the acquisition, which is expected to happen in the second quarter, the preferreds will cease to be traded as an over-the-counter security.

The board will meet at a later date to set the date for the special meeting of the preferred holders. The purposes of the special meeting will also include the election by the preferred holders of two additional trustees to the company's board in the event the merger transaction is not approved. If the merger is not approved, the board anticipates authorizing a common stock dividend to be issued to the holders of the preferreds on a basis of one common share for each preferred outstanding.

"We are pleased to have entered into a merger agreement that provides a cash purchase price to the holders of our series B preferred shares at a premium of approximately 10.5% over the average trading closing price from May 14, 2010 through Feb. 14, 2011," president and chief executive officer Jeffrey A. Patterson said in the release.

Prime Group Realty Trust is a real estate investment trust based in Chicago. Five Mile is a privately held alternative investment and asset management company based in Stamford, Conn.

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