MCLEAN, Va., Jan. 13 /PRNewswire-FirstCall/ -- Capital Automotive LLC (the "Company"), the nation's leading specialty finance company for automotive retail real estate, today announced that the Company has commenced cash tender offers for any and all of its outstanding 7 1/2% Series A Cumulative Redeemable Preferred Units (CUSIP No. 139733 11 7) and 8% Series B Cumulative Redeemable Preferred Units (CUSIP No. 139733 30 7) (the "LLC interests").
The Company is the successor to Capital Automotive REIT (the "REIT"), a Maryland real estate investment trust, which was merged with and into Capital Automotive LLC effective as of December 31, 2005 (the "Restructuring"). In the Restructuring, all of the holders of the REIT's outstanding Series A and Series B preferred shares received the Company's Series A and Series B LLC interests, respectively, with their rights, preferences, restrictions, qualifications, limitations, terms and conditions as provided in the instrument pursuant to which they were issued, the REIT's Articles Supplementary, with respect to the preferred shares materially unchanged.
In connection with the Restructuring, the REIT deregistered its Series A and Series B preferred shares under the Securities Exchange Act of 1934 (the "Exchange Act") and removed its Series A and Series B preferred shares from quotation on the Nasdaq National Market. The LLC interests are not registered under the Exchange Act, nor quoted on the Nasdaq National Market or any other automated quotation system or traded on or through any stock exchange.
Holders of LLC interests who validly tender their LLC interests at or before 5:00 p.m., New York City time, on Monday, February 13, 2006, unless extended (the "Expiration Time"), and do not validly withdraw their LLC interests at or before the applicable Expiration Time, will receive as payment for the LLC interests $25.00 per LLC interest. The Company expects to make the regular quarterly distribution payment on the LLC interests for the period ended January 31, 2006, when, as and if declared by its Board of Managers, to holders of LLC interests. When, as and if declared, the Board of Managers expects that this distribution will be payable to holders of record of the LLC interests as of February 1, 2006 on February 15, 2006. In addition, the Company expects to pay a partial distribution on the applicable payment date for each tender offer for distributions accrued between January 31, 2006 and the applicable Expiration Time to holders whose LLC interests are tendered in response to such tender offer and not withdrawn. The Company expects payment to be made on a business day promptly after the applicable Expiration Time. The Company expects that LLC interests that are not tendered will continue to receive regular distributions on a quarterly basis when, as and if declared by its Board of Managers. The Company will cease to make distribution payments on LLC interests purchased in a tender offer after the applicable payment date for such tender offer, except for the regular quarterly distribution payment payable to holders of record of the LLC interests as of February 1, 2006 on February 15, 2006.
Each tender offer is scheduled to expire at 5:00 p.m., New York City time, on Monday, February 13, 2006, unless extended or earlier terminated. Tendered LLC interests may not be withdrawn after the applicable Expiration Time, except as described in the Offer to Purchase, dated January 13, 2006, or as required by law.
The terms of the tender offers, and the conditions to which they are subject, including a financing condition, are described in the Offer to Purchase dated January 13, 2006, copies of which may be obtained from Morrow & Co., Inc., the information agent for the tender offers, at (800) 607-0088 (Holders of LLC interests) or (800) 662-5200 (Banks and Brokerage Firms).
The Company has retained Wachovia Securities to act as the exclusive Dealer Manager in connection with the tender offers. For additional information regarding the tender offers, contact Wachovia Securities at (866) 309-6316 (US Toll Free) or (704) 715-8341 (collect).
This announcement is not an offer to purchase or a solicitation of an offer to sell with respect to any LLC interests. The tender offers are being made solely by the Offer to Purchase dated January 13, 2006, and the related Letter of Transmittal.
About Capital Automotive
Capital Automotive, headquartered in McLean, Virginia, is a Delaware limited liability company. The Company's primary strategy is to acquire real property and improvements used by operators of multi-site, multi-franchised automotive dealerships and related businesses. Additional information on Capital Automotive is available on the Company's website at http://www.capitalautomotive.com/.
Forward-Looking Statements
Certain matters discussed within this press release are forward-looking statements within the meaning of the federal securities laws. Although the Company believes that the expectations reflected in the forward-looking statements are based upon reasonable assumptions, the forward-looking statements contained in this press release are subject to risks and uncertainties, including, but not limited to, risks related to the Company's conversion from a REIT to a limited liability company; risks that fewer than all of the LLC interests will be tendered; risks resulting from the fact that the LLC interests are not registered under the Exchange Act or quoted in or traded through any stock exchange or automated quotation system; risks associated with the increases in operating costs resulting from the additional expenses the Company has incurred relating to the Restructuring; risks that the Company's tenants will not pay rent; risks related to the mortgage loans in the Company's portfolio, such as the risk that borrowers will not pay the principal or interest or otherwise default, the level of interest income generated by the mortgage loans, the market value of the mortgage loans and of the properties securing the loans, and provisions of federal, state and local law that may delay or limit the Company's ability to enforce its rights against a borrower or guarantor in the event of a default under a loan; risks related to the Company's reliance on a small number of dealer groups for a significant portion of its revenue; risks of financing, such as increases in interest rates, the Company's ability to meet existing financial covenants and to consummate planned and additional financings on terms that are acceptable to the Company; risks that its growth will be limited if the Company cannot obtain additional capital or refinance its maturing debt; risks that planned and additional real estate investments may not be consummated; risks that competition for future real estate investments could result in less favorable terms for the Company; risks relating to the automotive industry, such as the ability of the Company's tenants to compete effectively in the automotive retail industry or operate profitably and the ability of its tenants to perform their lease obligations as a result of changes in any manufacturer's production, supply, vehicle financing, incentives, warranty programs, marketing or other practices or changes in the economy generally; risks generally incident to the ownership of real property, including adverse changes in economic conditions, changes in the investment climate for real estate, changes in real estate taxes and other operating expenses, adverse changes in governmental rules and fiscal policies and the relative illiquidity of real estate; risks related to the Company's financing of new construction and improvements; environmental and other risks associated with the acquisition and leasing of automotive properties; and those risks detailed in the Offer to Purchase.
CONTACT: David S. Kay, Senior Vice President, Chief Financial Officer and Treasurer of CARS Real Estate Investment Services Inc., +1-703-394-1302.
