Investment company bought, achieving a $3.8b price tag.

A newly formed company called Riley Property Holdings LLC, which is majority owned by affiliates of Cerberus Capital Management, L.P. and its real estate affiliate Blackacre Institutional Capital Management, LLC, has agreed to acquire LNR Property Corporation, one of the nation's leading real estate investment, finance and management companies valued at approximately $3.8 billion.

"We are very enthusiastic about this combination and the prospects it holds for our further growth. The associates of LNR will continue to thrive and lead the commercial real estate property, lending and securities markets across the country and abroad under our new structure," said Jeffrey Krasnoff, CEO of LNR, who will serve as CEO of Riley Property Holdings. "Our proven due diligence machine and hands-on management processes will continue to enable us to add value to the many investment opportunities that our new capital structure will facilitate."

Under the terms of the definitive merger agreement, Riley Property Holdings LLC, will acquire 100% of LNR's outstanding shares for $63.10 per share in cash. The merger is expected to be completed in early 2005.

LNR's board of directors voted unanimously to recommend that LNR's stockholders approve the transaction. That recommendation was based in part on a unanimous recommendation of a special committee of the board, consisting entirely of independent directors.

"This is an excellent opportunity for our shareholders to realize the value that has been created in LNR since its inception in 1997," said Stuart A. Miller, chairman of the LNR board of directors. "LNR will continue to grow and expand into new ventures with a group that has a proven track record of selecting investments that have excellent growth potential."