Control of Grubb & Ellis Co., the "sponsor" of Grubb & Ellis Realty Advisors (stock symbol: GAV), is changing through a reverse merger with NNN Realty Advisors:
Grubb & Ellis, California rival agree to merge
By James P. Miller
Tribune staff reporter
Published May 23, 2007
Real-estate services provider Grubb & Ellis Co. said Tuesday it agreed to combine with closely held NNN Realty Advisors Inc., a Santa Ana, Calif., firm that earlier this month filed regulatory documents for a planned initial public offering.
It now appears that NNN will become public through a different mechanism -- by merging with the smaller but publicly traded Grubb & Ellis.
Under the merger agreement, Chicago-based Grubb & Ellis said, NNN stockholders will exchange each share they currently hold for 0.88 Grubb & Ellis shares.
The commercial real estate advisory firm didn't say how many shares it will issue to effect the combination, but it did say that following completion of the proposed merger, Grubb holders will own 41 percent of the company and NNN holders will own about 59 percent.
The company will retain the Grubb & Ellis name and continue to trade under the symbol GBE, Grubb said.
However, it will be headquartered in Santa Ana, and Scott Peters, who is president and chief executive officer at NNN, will serve as CEO of the merged company.
The company's board of directors will include three nominees from Grubb & Ellis and six nominees from NNN Realty Advisors.
Grubb & Ellis shares initially jumped by 23 percent Tuesday but then eased to end the session up 86 cents, or 8 percent, at $11.62 on the New York Stock Exchange.
At that price the Chicago company has a market capitalization of roughly $301 million. Based on the ownership structure outlined in the merger announcement the combined company would have an indicated market cap of about $734 million.
The two merger partners said the combination is expected to close in the third or fourth quarter, subject among other things to approval by stockholders of both companies.
Grubb & Ellis Chairman C. Michael Kojaian said the stock-swap transaction "offers significant benefits to stockholders of both companies." The transaction is expected to add to earnings in the first year of operations following the closing, he added.
---------- jpmiller@tribune.com
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