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GlobeSt.com UPDATE: Lightstone Offers $889M for Prime Group

CHICAGO-Unlike a previous offer made by a group that includes former chairman Michael Reschke, Lakewood, NJ-based Lightstone Group's deal is not subject to financing. At stake is 7.4 million sf of city and suburban office space.

By Mark Ruda | Updated on February 17, 2005

CHICAGO-Prime Group Realty Trust, already in court with its former chairman over an offer to buy the REIT, has found a better offer. Lakewood, NJ-based Lightstone Group, which has been on a $2-billion buying spree in the past year, has made an $889.4-million offer that the Prime Group Realty Trust board of directors plans to recommend to shareholders.

The Lightstone Group offer is for $7.25 per share, topping a $6.70-per-share offer by Prime-Mansur Investment Partners, which includes former chairman Michael Reschke. Both deals involve assuming the REIT’s debt, which in the Lightstone offer is pegged at $595.4 million. Unlike the Prime-Mansur offer, however, the Lightstone Group offer is not subject to any financing condition.

Although Prime-Mansur Investment Partners got a $122-million commitment, the would-be buyers and REIT are arguing in a Maryland court whether the financing complied with terms of their October 2004 agreement. Prime Group Realty Trust says it will continue to fight Prime-Mansur Investment Partners in court, but its new deal transfers its position in the lawsuit to Lightstone Group.

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