NEWTOWN SQUARE, Pa., Feb. 12 /PRNewswire-FirstCall/ -- GMH Communities
Trust (NYSE: GCT), one of the leading providers of housing, lifestyle and
community solutions for college students and members of the U.S. military
and their families, today announced that it has entered into two definitive
agreements in connection with the sale of the military and student housing
divisions of GMH Communities Trust ("GMH Communities" or the "Company").
The first agreement is a securities purchase agreement with a U.S.
subsidiary of Balfour Beatty plc ("Balfour Beatty") pursuant to which
Balfour Beatty will purchase the Company's military housing division (the
"Military Housing Transaction"). The second agreement is a merger agreement
with American Campus Communities, Inc. (NYSE: ACC) ("ACC"), pursuant to
which, following the closing of the Military Housing Transaction, the
Company will be acquired by a subsidiary of ACC (the "Merger"). The
aggregate per share value of both the Military Housing Transaction and the
Merger is expected to be approximately $9.61 per share/unit, based on the
closing price of ACC's shares of common stock on February 11, 2008. The per
share/unit value represents a premium of 72% to the closing price of the
Company's common shares on February 11, 2008.
As described in more detail below, the announcement of an approximate
per share/unit amount in connection with the sale of the Company is the
result of a potential adjustment to the purchase price from the sale of the
Company's military housing division. Pending the closing of the Merger, the
Company will pay its regular quarterly dividend but only for the quarter
ending March 31, 2008. Pursuant to the merger agreement, the Company will
not be permitted to make any further distributions other than the
distributions described below.
Military Housing Transaction
Under the terms of the securities purchase agreement, Balfour Beatty
will purchase all of the issued and outstanding capital stock and limited
liability company interests of the subsidiaries representing the Company's
military housing division for $350 million in cash, subject to adjustment
pursuant to the terms of the securities purchase agreement. The Military
Housing Transaction is anticipated to result in net distributions to the
Company's common shareholders and to the unitholders of GMH Communities, LP
(the "Company Operating Partnership") of approximately $4.08 per
share/unit. The announcement of the approximate per share/unit amount is
because the aggregate purchase price will be increased or decreased to the
extent the estimated working capital of the military housing division as of
the closing exceeds or is below $14.5 million.
The $4.08 per share/unit distribution (the "Military Housing
Distribution") is expected to be paid in two separate distributions. One
will take place upon the closing of the Military Housing Transaction and
the second will take place immediately prior to the Merger. The net
distribution to shareholders and unitholders from the Military Housing
Transaction is expected to be made in two separate distributions because
the Company is expected to pay off, and terminate, its line of credit with
the proceeds from the sale of the military housing division and will retain
a portion of the net proceeds as working capital pending the closing of the
Merger.
Ian Tyler, CEO for Balfour Beatty, stated "the acquisition of GMH's
military accommodation business is central to implementing our US strategy
of building a high-quality, domestic US business similar to our very
successful UK model. It adds a major, high-quality US PPP business to our
US group in one of our key target market sectors. Through Balfour Beatty
Construction LLC, we have a strong long-term relationship with GMH Military
Housing and its senior management team, who share our philosophy of
long-term partnership with the customer. We attach great importance to the
skills and experience of GMH Military Housing's management team, who will
play a key role in the further development of the business."
Gary M. Holloway Sr., Company Chairman, CEO and President commented,
"The combination of GMH Military Housing with Balfour Beatty is a
transforming event for the industry leader in the military housing
business. We fully expect Balfour Beatty to build on GMH's experience and
tradition of delivering excellence to our country's service personnel and
their families."
In addition, Bruce Robinson, President of GMH Military Housing, stated
"We are extremely pleased to become a part of the Balfour Beatty family of
companies. This transaction allows our entire organization to remain
intact, while also providing us with the access to capital that is needed
to continue to grow our current business line, as well as pursue other
privatization opportunities."
Completion of the Military Housing Transaction, which is not subject to
shareholder approval, has been unanimously approved by the Company's Board
of Trustees. The Military Housing Transaction is currently expected to
close during the second quarter of 2008, subject to the satisfaction of
certain closing conditions that are customary in connection with the sale
of a business such as the military housing division. Balfour Beatty's
obligation to close the transactions contemplated by the securities
purchase agreement is not subject to a financing condition.
Student Housing Transaction
Following the sale of the military housing division, the Company will
be acquired by ACC pursuant to the merger agreement. Under the terms of the
merger agreement, each common share of the Company and each unit of the
Company Operating Partnership will be entitled to receive at the closing of
the Merger (i) 0.07642 of an ACC share of common stock and (ii) $3.36 in
cash, or approximately $5.53 in value based on the closing price of ACC's
shares of common stock on February 11, 2008 (the "Merger Consideration").
In connection with the Merger, the Company anticipates selling its home
office (the "Home Office") immediately prior to the closing of the Merger,
and will also have the right, but not the obligation, to sell ten
additional student housing assets (collectively with the Home Office, the
"Disposition Assets"). A percentage of the amount received, if any, in
connection with the sale of the Disposition Assets will be payable to the
Company's common shareholders and unitholders on the day preceding the
closing of the Merger (the "Special Distribution") and will be in addition
to the Merger Consideration. No assurance can be given that the Company
will be successful in disposing of any of the Disposition Assets.
Completion of the Merger is subject to the sale of the military housing
division and certain other customary closing conditions, including approval
of the Merger by the Company's shareholders. The closing of the Merger and
the transactions contemplated by the merger agreement is not subject to a
financing condition. The Merger is currently expected to close during the
second quarter of 2008. The Merger has been unanimously approved by the
Company's Board of Trustees, which also has recommended that the Company's
common shareholders approve the Merger.
"We look forward to welcoming the GCT investors who will be taking a
position in ACC along with the company's regional and field staff who will
be joining the ACC family," said Bill Bayless, American Campus CEO. "Their
continued hard work coupled with our premiere operating platform should
provide an opportunity for significant value creation."
Gary M. Holloway Sr., Company Chairman, CEO and President stated "ACC
and GMH are the established leaders in the student housing industry. This
combination represents a tremendous outcome for both companies' residents,
employees and investors. As major shareholders in the combined enterprise,
we have the utmost confidence in ACC's ability to grow our combined
platforms in this dynamic industry."
Wachovia Capital Markets, LLC served as financial advisor to the
Company, while Goodwin Procter LLP and Reed Smith LLP served as legal
counsel in connection with the sale of the Company.
About GMH Communities Trust
GMH Communities Trust (http://www.gmhcommunities.com) is a publicly-traded
Maryland real estate investment trust, or REIT. It is a self-advised, self-
managed, specialty housing company focused on providing housing to college
and university students residing off-campus and to members of the U.S.
military and their families residing on or near bases throughout the United
States. GMH Communities also provides property management services to
third-party owners of student housing properties, including colleges,
universities, and other private owners. GMH Communities, based in Newtown
Square, PA, employs more than 2,200 people throughout the United States.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of the Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934. Forward-looking statements can be
identified by the use of words such as "may," "will," "should," "expect,"
"estimate" or other comparable terminology. Numerous risks, uncertainties
and other factors may cause actual results to differ materially from those
expressed in any forward-looking statement. Such risks, uncertainties, and
other factors include, but are not limited to, (i) the occurrence of any
effect, event, development or change that could give rise to the
termination of the securities purchase agreement and/or the merger
agreement, (ii) the inability to complete the proposed transactions,
including in the case of the Merger, due to the failure of the Company's
shareholders to approve the Merger, (iii) the failure of any party to
satisfy the conditions to the closing of the transactions, (iv) the failure
of ACC to obtain the necessary financing arrangements set forth in a
commitment letter received in connection with the proposed Merger, (v)
risks related to the timing and amount of the Military Special
Distribution, (vi) risks that the Company will not successfully sell any of
the Disposition Assets in an amount sufficient to pay a Special
Distribution, (vii) risks that the proposed transactions disrupt current
plans and operations and the potential difficulties in employee retention,
and (vii) risks relating to the Company's business presented in its filings
with the SEC. Forward-looking statements are made as of the date of this
press release, and the Company undertakes no obligation to publicly update
or revise any forward-looking statement, whether as a result of new
information, future events or otherwise.
Additional Information and Where to Find It
This press release does not constitute an offer of any securities for
sale. In connection with the merger, ACC intends to file with the SEC a
registration statement on Form S-4, which will include a proxy
statement/prospectus of GMH Communities and ACC and other relevant
materials in connection with the proposed transactions. Investors and
security holders of GMH Communities are urged to read the proxy
statement/prospectus and the other relevant material when they become
available because they will contain important information about GMH
Communities, ACC and the proposed transactions. The proxy
statement/prospectus and other relevant materials (when they become
available), and any and all documents filed by GMH Communities or ACC with
the SEC, may be obtained free of charge at the SEC's web site at
http://www.sec.gov. In addition, investors and security holders may obtain free
copies of the documents filed with the SEC by GMH Communities by directing
a written request to GMH Communities Trust, 10 Campus Boulevard, Newtown
Square, Pennsylvania 19073, Attention: Investor Relations. Investors and
security holders may obtain free copies of the documents filed with the SEC
by ACC by directing a written request to American Campus Communities, Inc.,
805 Las Cimas Parkway, Suite 400, Austin, Texas 78746 Attention: Investor
Relations. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS AND THE OTHER RELEVANT MATERIALS WHEN THEY BECOME
AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO
THE PROPOSED TRANSACTIONS.
ACC, GMH and their respective executive officers, directors and
trustees may be deemed to be participants in the solicitation of proxies
from the security holders of GMH in connection with the merger. Information
about those executive officers and directors of ACC and their ownership of
ACC common stock is set forth in the proxy statement for ACC's 2007 Annual
Meeting of Stockholders, which was filed with the SEC on March 29, 2007.
Information about the executive officers and trustees of GMH and their
ownership of GMH common shares is set forth in the proxy statement for
GMH's 2007 Annual Meeting of Shareholders, which was filed with the SEC on
May 8, 2007. Investors and security holders may obtain additional
information regarding the direct and indirect interests of ACC, GMH and
their respective executive officers, directors and trustees in the Merger
by reading the proxy statement and prospectus regarding the Merger when
they become available.
SOURCE GMH Communities Trust
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Related links:
http://www.gmhcommunities.com/
CONTACT:
Joe Calabrese of the Financial Relations
Board, +1-212-827-3772
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