Exercises Right of First Offer to Purchase Remaining 26.5% Stake from Bank of America and Barclays
Lehman Brothers Holdings Inc. announced today that it has exercised its right of first offer to purchase the remaining stake in Archstone held by affiliates of Bank of America and Barclays Capital ("the Banks"), which will give Lehman full ownership of Archstone.
This transaction follows Lehman's purchase in January 2012 of a 26.5% interest previously held by the Banks. Both acquisitions were made to prevent Equity Residential from acquiring the same interests in order to protect and preserve the value of the Archstone enterprise, including its preeminent management platform, for the benefit of Lehman's creditors and all other Archstone stakeholders.
Lehman, through its subsidiary LCPI, will pay the Banks $1.58 billion of which $80 million is payable by the Banks to Equity Residential as a break-up fee. An additional termination fee of $70 million will be paid by Lehman to Equity Residential.
Also, as part of the transaction, each of Lehman, Bank of America, Barclays and Equity Residential will exchange mutual releases.
"With full ownership of Archstone, we will now be able to move forward and pursue monetization opportunities for the company," said Owen Thomas, Chairman of Lehman's Board of Directors. "This transaction protects Lehman's substantial investment, provides stability and gives us control of Archstone's future."
Jeff Fitts, Lehman's head of real estate, added: "We are very pleased to be purchasing the remaining 26.5 percent stake in the company, whose value had been impaired by the previous partnership structure. With a seasoned and stable management team and an irreplaceable portfolio of high quality apartment communities, Archstone continues to demonstrate strong financial performance."
"Lehman's decision to acquire the remaining stake in Archstone provides ownership support and organizational stability, and positions us for growth in the future," said Scot Sellers, Chief Executive Officer of Archstone. "Our entire team is excited to work with Lehman to create significant value in our platform and our portfolio."
Gleacher & Company served as Lehman's financial advisor and Weil Gotshal & Manges LLP served as its legal advisor in connection with these transactions.
Contacts:
Media Contacts:
Lehman Brothers Holdings Inc.
Kimberly
Macleod, 646-285-9215
kmacleod@lehmanholdings.com
or
Linden
Alschuler Kaplan Public Relations
Steven Alschuler, 212-575-4545
salschuler@lakpr.com
