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| Lightstone and Prime Retail Amend Merger Agreement |
BALTIMORE, Sept. 4 /PRNewswire-FirstCall/ -- Prime Retail, Inc. (the
"Company") (OTC Bulletin Board: PMRE, PMREP, PMREO) and The Lightstone Group,
LLC ("Lightstone"), a New Jersey-based real estate company, announced today
that they amended the merger agreement (the "Merger Agreement") entered into
on July 8, 2003 between Prime Outlets Acquisition Company, LLC (the "Buyer"),
a Delaware limited liability company which is an affiliate of Lightstone, and
the Company, which provides for the Company to be merged with the Buyer (the
"Acquisition").
The amendment increases the aggregate consideration payable to the
Company's shareholders and unit holders from $115,000,000 to $115,514,000 and
reflects a revised allocation of the consideration among the Company's classes
of capital stock. The revised allocation provides that each holder of the
Company's Series A preferred stock will receive cash in the amount of $18.400
per share, each holder of the Company's Series B preferred stock will receive
cash in the amount of $8.169 per share, and each holder of the Company's
common stock will receive cash in the amount of $0.170 per share. Compared to
the allocation initially announced by the Company on July 8, 2003, the revised
allocation results in an increase of $2.15 per share to the series A preferred
stockholders and a decrease of $0.491 and $0.01 per share to the series B
preferred stockholders and the common stockholders, respectively.
In connection with the amendment to the Merger Agreement, the Company's
senior management and Houlihan Lokey Howard & Zukin Capital ("Houlihan
Lokey"), the Company's financial advisor, agreed to forego fees and benefits
in the amount of $409,000 and $105,000, respectively, payable to them in
connection with the closing of the transaction.
Houlihan Lokey Howard & Zukin Financial Advisors, Inc., an affiliate of
Houlihan Lokey, has provided an opinion to the special committee and the
Company's board of directors that the consideration to be received pursuant to
the amended Merger Agreement by each of the classes of the Company's stock,
considered independently, is fair to such respective classes, from a financial
point of view.
On August 29, 2003, the Company received notice of a purported class
action lawsuit against the Company, the Company's board of directors and
Lightstone filed by four related series A preferred stockholders in the
Circuit Court for Baltimore City, Maryland on August 12, 2003. The lawsuit
alleges, among other things, that the Company's directors breached their
fiduciary duties in approving the proposed merger, that the consideration
payable in respect of the series A preferred stock is unfair and inadequate
and that the information made available by the Company in connection with the
transaction is deficient. The plaintiffs are seeking, among other things,
that the transaction contemplated by the Merger Agreement be enjoined or, in
the event such transaction is consummated, that it be rescinded and damages be
awarded to the series A preferred stockholder class members. The Company
believes the lawsuit is without merit and intends to respond accordingly.
The Company submitted revised preliminary proxy materials concerning the
Acquisition to the Securities and Exchange Commission (the "SEC") on September
3, 2003. These materials are available free of charge at the website
maintained by the SEC at http://www.sec.gov. In addition, you may obtain the
materials filed with the SEC by the Company free of charge by accessing the
Company's website at http://www.primeretail.com or by requesting such documents in
writing from Prime Retail, Inc., 100 East Pratt Street, 19th Floor, Baltimore,
Maryland 21202 or by telephone at (410) 234-0782.
Prime Retail is a self-administered, self-managed real estate investment
trust engaged in the ownership, leasing, marketing and management of outlet
centers throughout the United States. Prime Retail currently owns and/or
manages 36 outlet centers totaling approximately 10.2 million square feet of
GLA. Prime Retail also owns 154,000 square feet of office space. Prime
Retail has been an owner, operator and a developer of outlet centers since
1988. For additional information, visit Prime Retail's website at
http://www.primeretail.com.
Founded in 1988, The Lightstone Group has become one of the largest,
private real estate companies in the industry. The Company owns/manages a
diversified portfolio of 15,000 apartments as well as office, industrial and
retail properties totaling more than 8.5 million square feet of space in 16
states and Puerto Rico. Headquartered in Lakewood, New Jersey, The Lightstone
Group employs over 400 professionals and maintains offices in Maryland,
Virginia, California, and New York. The Lightstone Group is currently
embarked on an aggressive acquisition and expansion program throughout the
United States. For additional information, visit The Lightstone Group's
website at http://www.lightstonegroup.com.
Some of the statements contained herein which are not statements of
historical facts are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 that reflect management's
current views with respect to future events and financial performance. The
words "believes," "expects," "anticipates," "estimates" and similar words or
expressions are generally intended to identify forward-looking statements.
Actual results may differ materially from those expected because of various
risks and uncertainties, including, but not limited to, changes in general
economic conditions, adverse changes in real estate markets as well as other
risks and uncertainties included from time to time in the Company's filings
with the Securities and Exchange Commission. Prime Retail accepts no
responsibility for updating forward-looking statements.
INVESTOR NOTICE
Prime Retail plans to file with the SEC a proxy statement and other
relevant documents concerning the Acquisition. Investors of Prime Retail are
urged to read the proxy statement when it is filed and any other relevant
documents filed with the SEC because they will contain important information.
You will be able to obtain the documents, when they become available, free of
charge at the website maintained by the SEC at http://www.sec.gov. In addition, you
may obtain documents filed with the SEC by Prime Retail free of charge by
accessing the Company's website at http://www.primeretail.com or by requesting such
documents in writing from Prime Retail, Inc., 100 East Pratt Street, 19th
Floor, Baltimore, Maryland 21202 or by telephone at (410) 234-0782.
Prime Retail, its directors and executive officers and certain of Prime
Retail's employees may be deemed to be participants in the solicitation of
proxies from the stockholders of Prime Retail in connection with the
Acquisition. These participants may have interests in the Acquisition, if
consummated, including interests resulting from holding equity interests in
Prime Retail or its operating partnership. Information about the interests of
directors and executive officers of Prime Retail and their ownership of
securities of Prime Retail will be set forth in the proxy statement.
Investors should read the proxy statement carefully when it becomes
available before making any voting or investment decisions.
SOURCE Prime Retail, Inc.
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CONTACT:
Investors: Robert A. Brvenik, President and
Chief Financial Officer, +1-410-234-1750, or Media: Steven A.
Sless, Director - Public Relations, +1-410-234-8333, both of
Prime Retail; or David W. Lichtenstein, President and Chief
Executive Officer, The Lightstone Group, LLC, +1-732-367-0129, or
Media: Michael D. Beckerman, Beckerman Public Relations,
+1-908-781-6420, michael@beckermanpr.com, for The Lightstone
Group, LLC
