Archstone-Smith to be acquired by Tishman Speyer-Lehman partnership.

Englewood, Colorado-based REIT Archstone-Smith announced in May that it agreed to be acquired by a partnership sponsored by Tishman Speyer and Lehman Brothers Holdings Inc., both based in New York.

The exact terms of the transaction were not disclosed, but the companies valued the deal at approximately $22.2 billion, including the assumption and refinancing of Archstone-Smith's outstanding debt and excluding transaction costs.

Under the terms of the merger agreement, the Tishman-Lehman partnership will acquire all outstanding common shares of beneficial interest in Archstone-Smith for $60.75 per share in cash. The purchase price per share represents a 22.7 percent premium over the share price on May 24, 2007, immediately prior to published reports regarding a potential acquisition, the companies said.

"Archstone-Smith has created a fantastic portfolio of apartment communities, and has developed an industry-leading platform that includes more than 2,500 talented associates who are vital to our success," said R. Scot Sellers, chairman and chief executive officer of Archstone-Smith. "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. We are looking forward to continuing to provide great apartments and great service to our customers as part of the Tishman Speyer family, and continuing to grow our business for many years to come."

Archstone-Smith's board of trustees unanimously approved the merger agreement and the merger, and has recommended the approval of the transaction by common shareholders.

Completion of the transaction, which is currently expected to occur in the third quarter of 2007, is contingent upon customary closing conditions and the approval of Archstone-Smith's shareholders, who will be asked to vote on the proposed transaction at a special meeting that will be held on a date to be announced. The transaction is not contingent on receipt of financing by the Tishman-Lehman partnership, according to Rob Speyer, senior managing director of Tishman Speyer.

"Archstone is an exceptional company that has built one of the finest collections of multifamily assets in the industry," said Speyer. "We are excited to work with such an extraordinary management team led by Scot Sellers, and welcome the opportunity to help grow this company."