Price Legacy Corp. also will operate a wholly owned taxable REITsubsidiary under the banner Excel Legacy Corp. In the merger, eachoutstanding share of Legacy common stock will be converted intotwo-thirds of a share of Price Legacy Corp. common stock.
The shares of Price Enterprises 8-3/4% Series A cumulative redeemablepreferred stock and common stock outstanding at the time of the mergerwill remain outstanding as shares of the combined company. The merger,which is structured to qualify as a tax-free reorganization, is subjectto the approval of the stockholders of both companies and is expected toclose by mid-year.
The companies also announced a $100 million investment by WarburgPincus, a global private equity firm, in Price Legacy Corp. Under theterms of the investment, Warburg Pincus will purchase approximately 18million shares of a new class of preferred stock, and warrants topurchase an aggregate of 2.5 million shares of common stock of PriceLegacy Corp. at an exercise price of $8.25 per share.
Upon completion of the deal, Warburg Pincus will designate Reuben S.Leibowitz and Melvin L. Keating to the board of directors of PriceLegacy Corp. The Warburg Pincusinvestment is also subject to stockholder approval and is expected toclose at about the same time.
Following the merger, Price Legacy Corporation and its parent will ownand operate 45 properties and be involved in 13 development projects in12 states.
``At present, Legacy owns approximately 91.3% of the common stock ofPrice Enterprises," says Gary B. Sabin, current chairman of ExcelLegacy, will become CEO of the combined REIT. "We have been managing theLegacy and Price Enterprises properties for some time, so it is anatural progression to combine these two companies.''
``The merger transaction and the investment from Warburg Pincus shouldgive Price Legacy Corp. a strong financial foundation from which it cancontinue to grow and operate," he adds.
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