Anyone figure out this deal?
American Realty Trust and EQK Realty Investors I Announce Revised Merger Agreement
DALLAS and ATLANTA, Aug. 26 /PRNewswire/ -- American Realty Trust, Inc. (NYSE: ARB) and EQK Realty Investors I (OTC Bulletin Board: EQKR) Wednesday announced they have amended a December 1997 merger agreement where an affiliate of American Realty Trust (ART) will merge with EQK Realty Investors I (EQK) with EQK being the surviving entity. In addition, ART expects to purchase a total of 4,376,056 EQK shares from Lend Lease Portfolio Management, Inc. and certain other major shareholders. The total interest in EQK to be acquired by ART through the merger and the purchase of shares is expected to be approximately 49 percent.
As consideration for the merger, each EQK Realty Investors I shareholder, exclusive of the holders of shares being purchased by ART, will receive $0.14 (14 cents) per share for each EQK share owned, as of a record date to be specified and will be entitled to retain all their EQK shares. The payment will consist of 0.014 of a share of American Realty Trust's Series F Cumulative Convertible Preferred Stock.
In addition, American Realty Trust currently intends to acquire the remaining EQK Realty Investors I shares at some time after the third anniversary of the merger for not less than $0.486 (48.6 cents) per share in the form of an additional 0.0486 of an ART Series F Preferred Share. ART will be entitled to receive 673,976 newly issued EQK shares as consideration for the merger. American Realty Trust intends to file an application for the listing of its Series F Preferred Shares for trading on the New York Stock Exchange.
As previously announced, EQK Realty Investors I is selling the Harrisburg East Mall, the company's sole remaining real estate asset, and it intends to distribute proceeds from the sale to shareholders prior to the end of calendar 1998. The completion of the sale and the distribution of proceeds are a precondition to the closing of the merger. EQK has the right to terminate the merger agreement if it impairs or delays the sale, or is likely to result in a material reduction in proceeds. The reduction in consideration offered in the amended merger agreement, as compared to the previous agreement, reflects Harrisburg East Mall being excluded from the merger. If the mall were sold for its current appraised value ($62.3 million as of December 31, 1997), EQK estimates that the liquidating distribution would be in excess of $1.00 per share. There can be no assurance, however, that the actual price will equal the appraised value, and any variations in value may be material and adverse.
The merger is subject to the approval of EQK Realty Investors I shareholders. The terms and conditions will be set forth in an amendment to American Realty Trust's Registration Statement filed with the Securities and Exchange Commission (SEC). Neither the merger, nor the anticipated purchase of EQK shares by ART, will occur prior to the amended Registration Statement being declared effective by the SEC. |
