Zell Group proposes offer to purchase loan on Rockefeller Center.CHICAGO--(BUSINESS WIRE)--Oct. 27, 1995--Equity Office Holdings, I.L.C., (EOH EOH Environmental & Occupational Health EOH Engineering Open House EOH End of Hole (drill and bore holes) EOH Eye of Horus (gaming clan) EOH Equivalent Operating Hours ), a national office building investment and management company led by Samuel Zell, in a letter to Rockefeller Center Rockefeller Center, complex of buildings in central Manhattan, New York City, between 48th and 51st streets and Fifth Ave. and the Ave. of the Americas (Sixth Ave.). The project was sponsored by John D. Rockefeller, Jr. Properties Inc. (RCPI RCPI Royal College of Physicians of Ireland RCPI Regional Community Policing Institute RCPI Radio Communications of the Philippines, Inc. RCPI Research for Communication & Public Involvement ), today proposed on behalf of its investor group an offer to purchase from RCPI the mortgage loan on Rockefeller Center, in a transaction valued at $1.16 billion. The loan would be purchased for $1,160,900,000, to be paid $1,025,900,000 in cash and a $135 million note secured by a second mortgage on Rockefeller Center and guaranteed as to principal by General Electric. The GE guaranteed note would bear interest at 6 1/2% per annum Per annum Yearly. , payable monthly, and mature in 12 years. Upon the closing of the purchase, the EOH Investor Group would work with RGI/Mitsubishi to transition the property out of bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most . Excluding the dilutive effect Dilutive effect Result of a transaction that decreases earnings per common share (EPS). of the Goldman Sachs/Whitehall warrants and SARs issued in Dec., 1994, and without accounting for amounts owed by RCPI to the EOH Investor Group under existing agreements, this transaction would result in a value per share to RCPI of approximately $9.00. This bid meets the current objectives of the RCPI Board and is superior to the Board's other offers. It presents the greatest value or the long-term interests of RCPI shareholders and Rockefeller Center tenants. EOH has worked with the Board in good faith to meet its stated objectives and looks forward to its response. A full copy of the letter sent to RCPI chairman, Peter Linneman follows: October 27, 1995 Dr. Peter Linneman Chairman Rockefeller Center Properties Inc. 1720 Avenue of the Americas New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , New York 10020 Dear Peter: While we stand ready, willing and able to honor the existing definitive agreement, we have always been willing to explore alternatives. We have previously suggested the possibility of an outright purchase of the $1.3 billion mortgage loan at a mutually agreeable price. As an alternative that is clearly superior to your other offer as we understand them, and which the Board must thus consider as being in the best interests of its shareholders, we are prepared to offer the following: 1. Zell Investor Group would purchase the existing mortgage loan for $1,160,900,000, to be paid $1,025,900,000 in cash and a $135 million note secured by a second mortgage on Rockefeller Center and guaranteed as to principal by General Electric. The GE guaranteed note would bear interest at 6 1/2% per annum, payable monthly, and mature in 12 years, but would be prepayable at any time without premium. The $135 million note represents a face value to RCPI shareholders of $3.52 per share and, assuming not more than $815.5 million of RCPI liabilities, the net cash component equals $5.50 per share, for a total value of approximately $9.00 per share without accounting for either the Goldman Sachs/Whitehall warrants and SARs, on the one hand, and amounts owed to the Zell Investor Group under existing agreements with RCPI, on the other. 2. RCPI would be obligated ob·li·gate tr.v. ob·li·gat·ed, ob·li·gat·ing, ob·li·gates 1. To bind, compel, or constrain by a social, legal, or moral tie. See Synonyms at force. 2. To cause to be grateful or indebted; oblige. to transfer the mortgage loan free and clear of any and all liens and encumbrances; the Zell Investor Group would not assume any RCPI liabilities. 3. In purchasing the loan, the Zell Investor Group would inherit To receive property according to the state laws of intestate succession from a decedent who has failed to execute a valid will, or, where the term is applied in a more general sense, to receive the property of a decedent by will. inherit v. the responsibility for working out a reorganization plan A scheme authorized by federal law and promulgated by the president whereby he or she alters the structure of federal agencies to promote government efficiency and economy through a transfer, consolidation, coordination, authorization, or abolition of functions. with RGI/Mitsubishi. 4. There is to be no "fiduciary out Fiduciary out A provision that permits the Board of Directors to terminate a proposed merger if a better deal arises with another party. ." If this transaction were to fail to close for any reason other than a failure to obtain RCPI shareholder approval or a Zell Investor Group default, RCPI would be obligated to pay the Zell Investor Group a break-up fee of $25 million (which amount would include the $9,575,000 topping fee from the existing definitive agreement). 5. If there is no closing, other than due to a Zell Investor Group default (but whether or not RCPI shareholders approve the deal), breakage costs on any interest rate protection secured by the Zell Investor Group would have to be paid by RCPI. 6. If the sale of the loan closes in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with this proposal, the Zell Investor Group would waive To intentionally or voluntarily relinquish a known right or engage in conduct warranting an inference that a right has been surrendered. For example, an individual is said to waive the right to bring a tort action when he or she renounces the remedy provided by law for such its right to receive the topping fee and expense reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. provided for in the definitive agreement. If you advise us of your acceptance of this proposal not later than 5:00 p.m. (New York time) on Monday, Oct. 30, 1995, we are prepared to pursue such a transaction subject to: (a) RCPI honoring its obligations under the Investment Agreement by closing on the sale and purchase of the "Initial Shares" on Nov. 2, 1995; (b) final GE approval; (c) the termination by RCPI of discussions with Goldman Sachs/Whitehall and Gotham; (d) RCPI terminating the definitive agreement pursuant to the "fiduciary out" and acknowledging that the topping fee and expense reimbursement requirements thereunder have vested; and (e) the execution and delivery of a new definitive agreement (which we believe must be very short and to the point) by Nov. 10, 1995. Peter, the Board must act, as we have, consistent with its agreements. We have worked with the Board in good faith to meet its stated objectives. As the Board's objectives have changed, we have modified our proposals accordingly. The proposal outlined above clearly provides the best cash value to RCPI shareholders, while relieving the company from any further liability or costs due to the RGI/Mitsubishi bankruptcy. I look forward to your response. Very Truly Yours, (Signature) Samuel Zell Chairman CONTACT: Edelman Financial Debra Jack or Elliott Sloane, 212/704-8257 or 415/433-5381 |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion