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DENVER-AmeriVest Properties Inc., a small office REIT, plans to liquidate its dozen office buildings that cater to small- and medium-sized tenants. Several large shareholders, including the company's largest investor, have called on the company to liquidate in recent months.
Company execs, in a SEC filing on Friday, said the company's board approved a plan of liquidation for the company. The plan is subject to approval by the company's stockholders holding a majority of the company's outstanding shares of common stock. The company expects to present the plan for approval as soon as reasonably practicable, which could be at the its annual meeting.
Under the plan, the company intends to sell its assets on an orderly basis, to pay or provide for its liabilities, and to distribute its remaining cash to its stockholders. The company currently estimates that liquidating distributions will be paid throughout six to 24 months and that the stockholders could receive between $4.20 and $4.80 per share in total distributions over the liquidation period.
This estimated distribution range is based on numerous assumptions, including the estimated sale price of assets. However, there are no definitive sale agreements or letters of intent in place. Although the company's management says it believes its assumptions are reasonable, the assumptions may prove to be inaccurate and the ultimate amount of liquidating distributions to stockholders may be reduced or delayed.
"The board of directors has approved a plan of liquidation, which we believe will maximize stockholder value," Charlie Knight, CEO and president of the company, wrote to shareholders. "Based on the success of our strategic sales program completed last month and a review of all other available alternatives, the quality of the remaining properties and the fundamental improvement in many of our markets, we believe the time is right to present this alternative to our shareholders for approval."
In November 2004, the board authorized and retained the investment banking firm, Bear Stearns, to advise the company on various strategic, financial and business alternatives, including the potential sale or merger of the company and other possible transactions. In September, the company announced a strategic asset sale and operational restructuring plan to dispose of five properties, repay and restructure outstanding bank debt, and transition property management to third parties. Since that plan's completion, the board concluded it is in the best interest of the company's shareholders to liquidate.
The company has engaged discussions with a number of prospective purchasers for the company in a corporate transaction but no binding offer has been made and there is no assurance that an agreement for any such transaction could be reached. If, prior to stockholder approval of the plan, the company receives a binding offer for a corporate transaction it could take that offer if it believes it is superior to a liquidation. AmeriVest has retained Trammell Crow Co. to serve as real estate advisor and broker to the company in connection with the execution of the plan and sales of the properties in all markets.
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