CLEVELAND, April 22, 2015 /PRNewswire/ -- Associated Estates
Realty Corporation ("Associated Estates") (NYSE, NASDAQ: AEC) today
announced its Board of Directors has unanimously approved a
definitive merger agreement under which a real estate fund managed
by Brookfield Asset Management ("Brookfield") (NYSE/TSX: BAM; Euronext: BAMA)
will acquire all outstanding shares of common stock of Associated
Estates for $28.75 per share in cash.
The transaction is valued at approximately $2.5 billion including the assumption of
debt.
Brookfield is a global
alternative asset manager with more than $200 billion in assets under management.
Brookfield has over a 100-year
history of owning and operating assets with a focus on property,
renewable energy, infrastructure and private equity. Brookfield
Property Group, Brookfield's
largest investment platform, comprises of sector-specific
portfolios in the multifamily, office, retail, industrial, and
hotel sectors.
Jeffrey I. Friedman, Chairman and
Chief Executive Officer, said, "In December
2014, we announced that our Board was undertaking a thorough
business review with the assistance of our financial advisor.
After analyzing the Company's strategy, assets and other
opportunities, including running a process involving a number of
qualified potential buyers, the Board unanimously determined that
this transaction is the best course of action to maximize
shareholder value. We are pleased that Brookfield recognizes the value inherent in
our income producing properties, development projects and the
platform we have built. We are also excited that this
transaction will deliver compelling, immediate and certain value to
all Associated Estates shareholders."
Approvals and Anticipated Closing
Completion of the
transaction is contingent upon customary closing conditions. The
Company will convene a special meeting to seek the approval of
Associated Estates shareholders, and the annual meeting previously
scheduled for May 22, 2015 has been
postponed indefinitely. The transaction is not contingent on
receipt of financing by Brookfield.
Closing is expected to occur in the second half of 2015.
Associated Estates' headquarters will remain in Richmond Heights, Ohio.
First Quarter 2015 Financial Results and
Dividend
Associated Estates will release financial results
for its first quarter 2015 on Friday, May 1,
2015. In light of today's announcement, the Company will not
hold a conference call to discuss its first quarter financial
results.
The Company intends to pay the previously announced common stock
dividend of $0.21 per share on
May 1, 2015 to shareholders of record
as of April 15, 2015. The Company
does not expect to pay additional dividends prior to the closing of
the merger.
Advisors
Citigroup acted as exclusive financial
advisor to Associated Estates, and Jones
Day is acting as Associated Estates' legal advisor.
About Associated Estates
Associated Estates is a real
estate investment trust and a member of the S&P 600, Russell
2000, and MSCI US REIT Indices. The Company is headquartered in
Richmond Heights, Ohio. Associated
Estates' portfolio consists of 56 apartment communities containing
15,004 units located in 10 states, which include two committed
acquisitions with 681 units that are being managed during lease-up
and five apartment communities with 1,446 units in various stages
of active development. For more information about the Company,
please visit its website at www.associatedestates.com.
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995
This communication contains "forward-looking" statements within
the meaning of Section 21E of the Securities Exchange Act of 1934,
as amended, and the Private Securities Litigation Reform Act of
1995, known as the PSLRA. These statements, as they relate to
Associated Estates, its management or the proposed transaction
between Associated Estates and Brookfield, involve risks and uncertainties
that may cause results to differ materially from those set forth in
the statements. These statements are based on current plans,
estimates and projections, and therefore, you are cautioned not to
place undue reliance on them. No forward-looking statement
can be guaranteed, and actual results may differ materially from
those projected. Associated Estates undertakes no obligation to
publicly update any forward-looking statement, whether as a result
of new information, future events or otherwise, except to the
extent required by law. Forward-looking statements are not
historical facts, but rather are based on current expectations,
estimates, assumptions and projections about the business and
future financial results, and other legal, regulatory and economic
developments. We use words such as "anticipates," "believes,"
"plans," "expects," "projects," "future," "intends," "may," "will,"
"should," "could," "estimates," "predicts," "potential,"
"continue," "guidance," and similar expressions to identify these
forward-looking statements that are intended to be covered by the
safe harbor provisions of the PSLRA. Actual results could
differ materially from the results contemplated by these
forward-looking statements due to a number of factors,
including: the risk that the businesses will not be
integrated successfully; 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; restrictions imposed by
outstanding indebtedness and indebtedness incurred in connection
with the transactions; worldwide and regional economic, business,
and political conditions; changes in customer demand and
requirements; business cycles and other industry conditions; the
timing of new services or facilities; ability to compete with
others in the industries in which Associated Estates and
Brookfield operate; effects of
compliance with laws; fluctuations in the value of currencies in
major areas where operations are located; matters relating to
operating facilities; effect and costs of claims (known or unknown)
relating to litigation and environmental remediation; ability
to develop and further enhance technology and proprietary know-how;
ability to attract and retain key personnel; escalation in the cost
of providing employee health care; disruption from the transaction
making it more difficult to maintain relationships with customers,
employees or suppliers; the failure to obtain governmental
approvals of the transaction on the proposed terms and schedule,
and any conditions imposed on the combined company in connection
with consummation of the merger; the failure to obtain approval of
the merger by the shareholders of Associated Estates and the
failure to satisfy various other conditions to the closing of the
merger contemplated by the merger agreement; changes in the
economic climate in the markets in which Associated Estates owns
and manages properties, including interest rates; the overall level
of economic activity; the availability of consumer credit and
mortgage financing, unemployment rates and other factors; risks of
a lessening of demand for the multifamily units owned by Associated
Estates; competition from other available multifamily units, single
family units available for rental or purchase, and changes in
market rental rates; the failure of development projects or
redevelopment activities to achieve expected results due to, among
other causes, construction and contracting risks; unanticipated
increases in materials and/or labor, and delays in project
completion and/or lease-up that result in increased costs and/or
reduce the profitability of a completed project; losses resulting
from property damage or personal injury that are not insured;
results of litigation involving Associated Estates; the cost,
disruption and diversion of management's attention associated with
campaigns commenced by activist investors seeking to influence
Associated Estates to take particular actions favored by the
activist or gain representation on Associated Estates' Board of
Directors; information security breaches and other disruptions that
could compromise our information and expose us to business
interruption, increased costs, liability and reputational damage;
and risks associated with property acquisitions and dispositions,
such as failure to achieve expected results and the risks that are
described from time to time in Associated Estates' reports filed
with the SEC, including its annual report on Form 10-K for the year
ended December 31, 2014, as such
report may have been amended. This document speaks only as of
its date, and Associated Estates disclaims any duty to update the
information herein.
Additional Information and Where to Find It
In connection with the proposed transaction, a preliminary proxy
statement on Schedule 14A will be filed with the SEC.
ASSOCIATED ESTATES SHAREHOLDERS ARE ENCOURAGED TO READ THE
PRELIMINARY PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED
WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER. The final
proxy statement will be mailed to shareholders of Associated
Estates. Investors and security holders will be able to
obtain the documents free of charge at the SEC's website,
www.sec.gov or from Associated Estates at its website,
www.associatedestates.com, or by contacting Jeremy Goldberg, Vice President of Corporate
Finance and Investor Relations at (216) 797-8715.
Participants in Solicitation
Associated Estates and its directors and executive officers and
other members of management and employees may be deemed to be
participants in the solicitation of proxies in respect of the
proposed merger. Information concerning Associated Estates'
participants is set forth in the proxy statement, filed
April 3, 2015, for Associated
Estates' 2015 annual meeting of shareholders as filed with the SEC
on Schedule 14A. Additional information regarding the
interests of participants of Associated Estates in the solicitation
of proxies in respect of the proposed merger will be included in
the proxy statement and other relevant materials to be filed with
the SEC when they become available.
Associated Estates Contact
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Media Contacts
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Jeremy Goldberg
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Andrew Siegel / Jon Keehner
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(216) 797-8715
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Joele Frank, Wilkinson Brimmer
Katcher
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(212) 355-4449
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SOURCE Associated Estates Realty Corporation