CBL & Associates Properties to Acquire 21 Malls From Jacobs Group for $1.2 Billion, Solidifies Dominant Position in Southeast, Accelerates Expansion into Midwest.Business Editors CHATTANOOGA, Tenn.--(BUSINESS WIRE)--Sept. 25, 2000 CBL Cbl cobalamin. & Associates Properties, Inc. (NYSE NYSE See: New York Stock Exchange :CBL) and The Richard E. Jacobs Group, Inc. ("Jacobs") today announced they have signed a definitive agreement for CBL to acquire Jacobs interests in 21 regional malls and two associated centers for a purchase price of approximately $1.2 billion. The portfolio, totaling approximately 19.2 million square feet, includes five malls in Wisconsin, three each in North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. , Kentucky and South Carolina South Carolina, state of the SE United States. It is bordered by North Carolina (N), the Atlantic Ocean (SE), and Georgia (SW). Facts and Figures Area, 31,055 sq mi (80,432 sq km). Pop. (2000) 4,012,012, a 15. , two each in Michigan and Ohio, one each in Illinois, Tennessee and Texas and an associated center in both Ohio and Wisconsin. The agreement has been approved by CBL's Board of Directors and is subject to CBL shareholder approval as well as certain Jacobs lender and partner consents. The acquisition is expected to close in the first quarter of 2001. The purchase price includes approximately $106 million in cash, including closing and transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). of approximately $12 million; assumption of $733.8 million in primarily fixed rate non-recourse debt Non-Recourse Debt A loan that is secured by some sort of collateral, usually property. The issuer can seize the collateral if the borrower defaults. Notes: These types of projects are characterized by high capital expenditures, long loan periods, and uncertain revenue at an average interest rate of 8.25%; and the issuance of 11.932 million SCUs (special common units) of CBL's operating partnership with a par value of $384.8 million. The SCUs will be entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: to receive an initial annual dividend of $2.90 per SCU SCU Santa Clara University SCU Southern Cross University (New South Wales, Australia) SCU Southern California University of Health Sciences (Whittier, California) SCU Serious Crimes Unit SCU Special Care Unit and will be exchangeable on a one-for-one basis for shares of CBL's common stock following a three-year lockout lockout, intentional closing up of a company, factory, or shop by an employer to prevent employees from working during a strike or labor dispute. The term lockout period. After 10 years, CBL will have the right to force conversion of the SCUs for common units in CBL's operating partnership. The cash portion of the purchase price will be funded through a $212 million unsecured acquisition loan from Wells Fargo Wells Fargo armored carriers of bullion. [Am. Hist.: Brewer Dictionary, 1147] See : Protectiveness Wells Fargo company that handled express service to western states; often robbed. [Am. Hist. Bank that will allow for payment of closing and transaction costs. The loan will also allow for the draw down of funds for additional investment in the properties. The transaction is immediately accretive to funds from operation (FFO FFO See: Funds from operations ). Based on the first full 12 months of NOI NOI Net Operating Income NOI Notice of Intent NOI Nation of Islam NOI Notice of Inquiry NOI Neuro Orthopaedic Institute NOI New Organizing Institute NOI Notice of Interest NOI No Offense Intended NOI National Olympiad in Informatics , the transaction is accretive by approximately $0.20 per share. In calendar year 2001, the company estimates it will realize approximately $0.08 per share of accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the . The difference of $0.12 per share, representing the impact from generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) treatment of first year's percentage rents from these properties, will be recognized in 2002 earnings. When the acquisition is concluded, CBL's portfolio will total 161 properties, including 51 enclosed en·close also in·close tr.v. en·closed, en·clos·ing, en·clos·es 1. To surround on all sides; close in. 2. To fence in so as to prevent common use: enclosed the pasture. malls, representing 55 million square feet in 26 states, making it one of the top five owners of shopping centers shopping center, a concentration of retail, service, and entertainment enterprises designed to serve the surrounding region. The modern shopping center differs from its antecedents—bazaars and marketplaces—in that the shops are usually amalgamated into in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. based on national surveys published in January of this year. Charles B. Lebovitz, CBL's chairman and chief executive officer, said, "This acquisition is truly an exciting and unique opportunity for our company. Our interest in the Jacobs properties was driven by the significant growth potential and synergies that would result from combining our assets with their portfolio as well as the strengthening of our geographic dominance in the market areas where we currently operate. "The most compelling reason for adding these centers to our portfolio is not size but rather the tremendous opportunities to apply the proven redevelopment, management and leasing expertise of our experienced team to maximize the internal growth from these properties. We are committed to continuing to add value for the benefit of our shareholders." "We are delighted with this transaction with CBL," stated Richard E. Jacobs, chairman and chief executive officer of The Richard E. Jacobs Group, Inc. "The combination of these properties with the CBL portfolio will create real value for all CBL investors, including us. This transaction further endorses our belief in CBL's management team, its financial strength, and the growth opportunities and synergies that will be created by the combination of our two portfolios." John N. Foy, CBL's vice chairman and chief financial officer, added, "We have stated for some time that we would only acquire a large portfolio of shopping centers if the economics and structure of the deal provided long-term growth potential greater than we could achieve through individual acquisitions. We believe this transaction meets our stringent criteria and, more importantly, creates value for our shareholders with properties that will be accretive to FFO from day one. We expect this transaction will accelerate our FFO and dividend growth over the next several years." "These properties are consistent with our focus on malls that have a dominant franchise in their respective market areas," said Stephen D. Lebovitz, president of CBL. "We expect to enhance their franchise value through our leasing and specialty leasing programs, aggressive marketing and property management, and renovation and redevelopment of the projects where needed." Stephen Lebovitz further noted, "This transaction clearly defines CBL as the leading mall owner in the Southeast and accelerates our previous expansion into the Midwest. With our knowledge of these markets and our dominant position in the Southeast region, we believe this transaction will add significant value to our company." Upon approval of the transaction, CBL's board of directors will increase by two members to nine. Jacobs will be entitled to nominate nom·i·nate tr.v. nom·i·nat·ed, nom·i·nat·ing, nom·i·nates 1. To propose by name as a candidate, especially for election. 2. To designate or appoint to an office, responsibility, or honor. two independent directors, one of whom is a current member of Jacobs management. Investor Conference Call and Web Simulcast CBL & Associates Properties will conduct a conference call on September 26, 2000, at 10:30 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT to further discuss this announcement and will provide an online Web simulcast and rebroadcast of this conference call. The number to call for this interactive teleconference is 719/457-2633. A replay of the conference call will be available until September Until September is a 1984 romantic drama set in France. It stars Karen Allen as an American tourist in Paris who falls in love with a married Frenchman (Thierry Lhermitte). External links 29, 2000, by dialing 719/457-0820 and entering the passcode, 626956. The live broadcast of CBL's conference call will be available online at www.cblproperties.com, www.streetevents.com or www.vcall.com on September 26, 2000, beginning at 10:30 a.m. EDT. The online replay will follow shortly after the call and continue through October 26, 2000. CBL & Associates Properties, Inc. is a real estate investment trust that owns regional malls and community shopping centers, primarily in the Southeast and select markets in the Northeast and Midwest. The Company currently has a portfolio of 138 properties in 25 states totaling 35.8 million square feet, including 1.8 million square feet of non-owned shopping centers managed for third parties. The Company has under construction seven new projects totaling approximately 2.2 million square feet, including two malls, one associated center, two community centers and two mall expansions. Merrill Lynch Merrill Lynch & Co., Inc. (NYSE: MER TYO: 8675 ), through its subsidiaries and affiliates, provides capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related products and services on a global basis. acted as advisor for the company in this transaction. In addition to its headquarters in Chattanooga, TN, CBL has a regional office in Boston (Waltham), MA. The Company can be found on the Internet at www.cblproperties.com. The Richard E. Jacobs Group is widely acknowledged as one of the pioneer companies of the modern shopping center industry, having grown to become the largest privately held regional shopping center ownership, development, and management firm in the United States. The company engaged The Goldman Sachs The Goldman Sachs Group, Inc., or simply Goldman Sachs (NYSE: GS) is one of the world's largest global investment banks. Goldman Sachs was founded in 1869, and is headquartered in the Lower Manhattan area of New York City at 85 Broad Street. Group, Inc., to explore the potential disposition of the majority of its assets as an estate planning Estate Planning The overall planning of a person's wealth, including the preparation of a will and the planning of taxes after the individual's death. Notes: Contrary to popular belief, estate planning involves much more than preparing a will, and it is not only for the measure by its co-founder and chairman, Richard E. Jacobs, and other related family trusts. The CBL acquisitions represent approximately 40 percent of the 46 million square feet of shopping center, office, and hotel developments in the total Jacobs Group portfolio. Information included herein contains "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the federal securities laws. Such statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual events, financial and otherwise, may differ materially from the events and results discussed in the forward-looking statements. The reader is directed to the Company's various filings with the Securities and Exchange Commission, including without limitation the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and the "Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations" incorporated by reference therein, and the Company's current report on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. being filed in connections with the transaction described herein, for a discussion of such risks and uncertainties.
The shopping centers acquired from the Jacobs portfolio are:
Mall (Market) Total GLA Mall Store Percentage to
GLA be Acquired
Illinois
--------
Cherryvale Mall (Rockford) 714,000 300,000 84%
Kentucky
--------
Fayette Mall (Lexington) 1,096,000 298,000 100
Jefferson Mall (Louisville) 936,000 275,000 87(1)
Kentucky Oaks (Paducah) 878,000 298,000 40(2)
Michigan
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Midland Mall (Midland) 514,000 196,000 40(1)
Fashion Square Mall (Saginaw) 786,000 287,000 100
North Carolina
--------------
Randolph Mall (Asheboro) 376,000 147,000 100
Cary Towne Center (Cary) 953,000 294,000 80
Hanes Mall (Winston-Salem) 1,556,000 548,000 100
Ohio
----
Eastgate Mall (Cincinnati) 905,000 268,000 54(1)
Eastgate Crossing (Cincinnati) 194,000 54(1)
Towne Mall (Franklin) 521,000 152,000 100
South Carolina
--------------
Citadel Mall (Charleston) 1,068,000 294,000 100
Columbia Mall (Columbia) 1,113,000 297,000 79(1)
Northwoods Mall (North Charleston) 833,000 312,000 100
Tennessee
---------
Old Hickory Mall (Jackson) 555,000 159,000 100
Texas
-----
Parkdale Mall (Beaumont) 1,411,000 462,000 100
Wisconsin
---------
East Towne Mall (Madison) 895,000 295,000 65(1)
West Towne Mall (Madison) 1,021,000 260,000 65(1)
West Towne Crossing (Madison) 447,000 65(1)
Brookfield Square Mall (Milwaukee) 1,041,000 316,000 100
Regency Mall (Racine) 918,000 268,000 100
Wausau Center (Wausau) 429,000 156,000 100
(1) CBL will potentially acquire additional interests through an
offer to purchase outside partner interests
(2) Managed by a third party
Mall Anchors
Illinois
--------
Cherryvale Mall Bergner's, Marshall Field, Sears
Kentucky
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Fayette Mall Dillard's, JC Penney, Lazarus, Sears
Jefferson Mall Dillard's, JC Penney, Lazarus, Sears
Kentucky Oaks Dillard's(2), Elder-Beerman, JC Penney,
Sears, ShopKo
Michigan
--------
Midland Mall Elder-Beerman, JC Penney, Sears, Target
Fashion Square Mall Hudson's, JC Penney, Sears
North Carolina
--------------
Randolph Mall Belk, JC Penney, Sears
Cary Towne Center Hudson Belk, Dillard's, Hecht's, JC Penney,
Sears
Hanes Mall Belk, Dillard's, Hecht's, JC Penney, Sears
Ohio
----
Eastgate Mall Dillard's, JC Penney, Kohl's, Sears
Eastgate Crossing Border's, Circuit City, Kids 'R Us, Kroger
Towne Mall Dillard's, Elder-Beerman, Sears
South Carolina
--------------
Citadel Mall Belk, Dillard's, JC Penney, Parisian, Sears
Columbia Mall Dillard's, JC Penney, Rich's, Sears
Northwoods Mall Belk, Dillard's, JC Penney, Sears
Tennessee
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Old Hickory Mall Belk, Goldsmith's, JC Penney, Sears
Texas
-----
Parkdale Mall Dillard's(2), JC Penney, Montgomery Ward,
Sears
Wisconsin
---------
East Towne Mall Boston Store, JC Penney, Sears, Younkers
West Towne Mall Boston Store, JC Penney, Sears, Younkers
West Towne Crossing Barnes & Noble, Best Buy, Cub Foods,
Ganders Mountain, Kohl's, Office Max, ShopKo
Brookfield Square Mall Boston Store, JC Penney, Sears
Regency Mall Boston Store, JC Penney, Sears, Younkers
Wausau Center JC Penney, Sears, Younkers
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