Brookfield Asset Management Sponsored Fund to Acquire Verde Realty by Merger
26 Juli 2012 - 4:30PM
Marketwired
Brookfield Asset Management Inc.'s
(TSX:BAM.A)(NYSE:BAM)(EURONEXT:BAMA) Brookfield Property Group
("Brookfield"), Hillwood Development Company, LLC ("Hillwood") and
Verde Realty ("Verde"), a Houston-based REIT that acquires,
develops, owns and manages industrial distribution facilities,
today announced Verde and a fund sponsored by Brookfield ("the
Fund") have entered into a definitive merger agreement for a
transaction that will provide Verde shareholders with a price of
$12.85 per share and a total equity transaction value of up to $366
million.
In conjunction with the signing of the merger agreement, the
Fund and certain shareholders of Verde, comprising approximately
19% of the outstanding shares, have entered into definitive voting
agreements whereby such shareholders have agreed to vote in favor
of the merger and against any alternative transactions.
At closing, a subsidiary of the Fund will merge into Verde
Realty, with Verde as the surviving entity. Hillwood will be an
investor in Verde.
All existing shareholders will be entitled to receive cash in
the merger. Shareholders who are accredited investors will also
have a right to elect to receive common shares of the surviving
company in lieu of cash, provided that they also sign a
shareholders' agreement (such rollover right to be reduced pro-rata
to meet a requirement that the Fund will acquire at least 55% of
Verde on a fully diluted basis). Concurrently with, and subject to
the closing of the merger, Verde will also offer to purchase any
and all outstanding common partnership units and convertible
preferred units for $12.85 per unit and to purchase convertible
debentures of Verde's operating partnership for a common unit
equivalent value (i.e. $12.85/unit). The transaction is subject to
shareholder approval and other customary closing conditions and is
expected to be completed in the fourth quarter of 2012. Wells Fargo
Securities has rendered a fairness opinion to Verde with respect to
the price per share.
"This merger transaction with Brookfield ensures that Verde is
well-positioned to benefit from renewed demand for industrial space
which will increase as the economy continues to show signs of
improvement," commented Ronald Blankenship, Chairman and Chief
Executive Officer of Verde.
As investment opportunities arise, the Fund has agreed to
negotiate in good faith to provide additional capital to Verde in
the form of a backstop for rights offerings of up to $200
million.
"We are excited for the opportunity to work with the experienced
Verde team and expanding the breadth of our real estate operations,
establishing a cornerstone investment in an industrial platform of
high-quality industrial properties," said David Arthur, Managing
Partner at Brookfield Asset Management.
The shareholder meeting to consider the merger will be on August
29, 2012, and, assuming the transaction is approved, closing is
expected to occur in the fourth quarter. Proxy materials will be
mailed to investors shortly. In addition, the merger agreement is
available on Verde's website at www.verderealty.com.
Verde Investor Presentation
Verde will host an investor call and presentation (existing
investors only) at 10:00 a.m. (Eastern Time), on Tuesday August 7,
2012. Additional information on the investor call and presentation
will be distributed directly to Verde's investors.
About Verde
Verde, a Maryland real estate investment trust, is a fully
integrated, self-administered and self-managed REIT that
specializes in the ownership, acquisition and management of
industrial distribution facilities. Verde's existing operating
portfolio is composed primarily of industrial distribution
facilities in the southwestern United States, California, suburban
Chicago, Maryland, Utah and northern Mexico.
Brookfield Asset Management Inc. is a global alternative asset
manager with approximately $150 billion in assets under management.
The company has over a 100-year history of owning and operating
assets with a focus on property, renewable power, infrastructure
and private equity. Brookfield has a range of public and private
investment products and services, which leverage our expertise and
experience and provide us with a competitive advantage in the
markets where we operate. Brookfield is co-listed on the New York
and Toronto Stock Exchanges under the symbol BAM and BAM.A,
respectively, and on NYSE Euronext under the symbol BAMA. For more
information, please visit our website at www.brookfield.com.
Important Information
Verde will circulate a joint proxy statement and private
placement memorandum regarding the proposed transaction. This
document is not currently available, but is expected to be
delivered to investors within the next 7-10 days at the address
currently on file with Verde. THE JOINT PROXY STATEMENT AND PRIVATE
PLACEMENT MEMORANDUM WILL CONTAIN IMPORTANT INFORMATION REGARDING
THE PROPOSED TRANSACTION; INVESTORS ARE URGED TO READ THIS
INFORMATION WHEN IT BECOMES AVAILABLE.
Forward Looking Statements
Certain statements in this press release may contain
forward-looking information regarding Verde Realty, Brookfield and
the combined company after the completion of the transaction that
are intended to be covered by the safe harbor for "forward-looking
statements" provided by the Private Securities Litigation Reform
Act of 1995. These statements include, but are not limited to, the
benefits of the transaction involving Verde and Brookfield,
including future financial and operating results, the new company's
plans, objectives, expectations and intentions and other statements
that are not historical facts. Such statements are based upon the
current beliefs and expectations of Verde's management and
Brookfield and are subject to significant risks and uncertainties.
Actual results may differ from those set forth in the
forward-looking statements.
The following factors, among others, could cause actual results
to differ from those set forth in the forward-looking statements:
the ability to obtain third-party approvals of the transaction on
the proposed terms and schedule; the failure of Verde shareholders
to approve the transaction; the risk that Verde will not be
integrated successfully with and into Brookfield's organization;
the risk that the cost savings and any other synergies from the
transaction may not be fully realized or may take longer to realize
than expected; disruption from the transaction making it more
difficult to maintain relationships with customers or employees;
competition and its effect on revenues, expenses and third-party
relationships; social and political conditions such as war,
political unrest or terrorism; general economic conditions and
normal business uncertainty. Additional risks and factors will be
identified in Verde's joint proxy statement and private placement
memorandum regarding the proposed transaction to be delivered to
investors.
You should not place undue reliance on forward-looking
statements, which speak only as of the date of this press release.
Neither Verde nor Brookfield undertakes any obligation to release
publicly any revisions to any forward-looking statements to reflect
events or circumstances after the date of this press release.
Contacts: Brookfield Asset Management Media and Investors:
Katherine Vyse SVP, Investor Relations (416) 369-8246 (416)
363-2856 (FAX)katherine.vyse@brookfield.com www.brookfield.com
Contacts: Verde Realty Media and Investors: Richard Moore (713)
338-3105 (713) 585-9396 (FAX)richard.moore@verderealty.com
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