(Read more on the multifamily market.)
DENVER-Archstone-Smith Trust says it has agreed in principle to settle all disclosed shareholder lawsuits regarding its $22-billion sale to an entity jointly controlled by affiliates of Tishman Speyer Real Estate Venture VII LP and Lehman Brothers Holdings Inc. The settlement, which would dismiss all such claims, is subject to court approval.
As part of the settlement, Archstone-Smith says plaintiffs will petition the court to have it cover everyone's attorneys' fees up to an agreed-upon limit if the merger is completed. A special meeting of Archstone-Smith's common shareholders to vote on the merger and other transactions contemplated by the merger agreement has been scheduled for tomorrow (Tuesday, Aug. 21) at the Hyatt Regency Denver Tech Center.
Earlier this month, Archstone-Smith extended a deadline for the close of the merger to Oct. 4 from Aug. 31. The company also waived a condition calling for unitholders to release Archstone-Smith and its buyers from previously existing tax protection agreements.
The amendment did not alter the price; the agreement calls for the buyers to pay $60.75 for each outstanding common share, to assume approximately $6.3 billion in existing debt, and to pay off Series I preferred shareholders and unitholders of the operating partnership. When the deal was announced in May, the offer represented a 22.7% premium over Archstone-Smith's share price. Bank of America is providing some or all of the debt financing associated with the transaction.
Archstone-Smith, an S&P 500 company, owned all or part of 86,014 units in 344 properties as of the end of March and had 3,500 employees. The company's portfolio is concentrated in the Washington, DC metropolitan area, Southern California, the San Francisco Bay Area, the New York metropolitan area, Seattle and Boston.
Tishman Speyer's multifamily portfolio totals approximately 11,500 units, located primarily in New York City. Almost all of it was acquired in October, when with Blackrock Inc. it paid $5.4 billion for the Stuyvesant Town and Peter Cooper Village properties from MetLife, Inc, as GlobeSt.com previously reported.
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