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Grubb & Ellis announces preliminary equity pact.

Noel Spillane, senior vice president and regional manager of Wm. A. White/Grubb & Ellis announced that the company has entered into a letter of intent with Warburg, Pincus Investors, L.P. and The Prudential Insurance Company of America regarding the restructuring of the equity and debt of the Company.

The restructuring would involve a cash investment of 13.75 million by Warburg in exchange for convertible preferred stock and warrants and a restructuring of the company's indebtedness of approximately $40 million to Prudential, with the conversion of $15 million of the indebtedness to convertible preferred stock.

After the restructuring, Warburg would hold approximately 40 percent and Prudential approximately 27 percent of the equity of the company on a fully diluted basis but before the exercise of Warburg's warrants. As a part of the restructuring, both Warburg and Prudential would have the right to name representatives to the board of directors of the company.

The investment is subject to completion of a definitive agreement and certain other approvals and conditions, including the obtaining of a fairness opinion on the restructuring from an investment banking firm and the approval of the shareholders of the Company. The restructuring is expected to close by Dec. 31, 1992.
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Title Annotation:Grubb and Ellis Co. Wm. A. White Div. signs letter of intent with Warburg (E.M.), Pincus and Company Inc. and Prudential Insurance Company of America for restructuring of Grubb and Ellis Co.'s finances
Publication:Real Estate Weekly
Date:Sep 9, 1992
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