New York, N.Y. May 19, 2005: Wellsford Real Properties, Inc. (AMEX:WRP) (the “Company“) today announced that its Board of Directors (the “Board”) has approved a Plan of Liquidation (the “Plan”) and a 1 for 100 Reverse Stock Split and a 100 for 1 Forward Stock Split of its common shares (together the “Stock Split”). The Plan and the Stock Split are each subject to the separate approval of the Company’s stockholders at an annual meeting, to be announced, which will be held subsequent to the mailing of a proxy.
The Company previously reported that in March 2004 the Board authorized and retained the financial advisory firm, Lazard Ltd, to advise the Company on various strategic financial and business alternatives available to it to maximize stockholder value. These included a recapitalization, acquisitions, disposition of assets, liquidation, the sale or merger of the Company and alternatives that would keep the Company independent. After consideration of the alternatives available to the Company, the Board has determined and recommends that liquidation is advisable and in the best interests of the Company’s stockholders. The Board also recommends the implementation of the Stock Split, which could make the Company’s operations more cost effective whether or not the Plan is approved by Stockholders.
Under the Plan, the Company intends to sell its assets, to pay or provide for its liabilities, and to distribute its remaining cash to its stockholders. The Board currently estimates that stockholders could receive $18.00 to $20.50 per share in total distributions over the liquidation period including an initial distribution of $12.00 to $14.00 per share within 30 days after the later of the closing of the sale of the Palomino Park rental apartments and stockholder approval of the Plan. The estimated time frame for payment of these proceeds will be described in the proxy statement to be filed.
A Stock Split would reduce the number of record holders of the Company’s common stock to below 300, thereby making the Company eligible for (i) deregistration under the Securities Exchange Act of 1934, as amended, and (ii) the de-listing of its common stock from the American Stock Exchange. Accomplishing these objectives would relieve the Company of the costs associated with complying with the various reporting and governance requirements of the Securities and Exchange Commission (“SEC”) and American Stock Exchange. This action also would save the Company significant expenses associated with Sarbanes-Oxley Act reporting requirements. It is anticipated that only stockholders owning 99 or fewer pre-split common shares of the Company would receive $20.50 per pre-split share in cash for their shares. Currently, the Company has 6,467,639 common shares outstanding and it is anticipated that approximately 4,000 common shares will be purchased by the Company in order to complete the Stock Split.
Mr. Jeffrey Lynford, Chairman and CEO stated, ’Your Board of Directors, after significant analysis, has adopted a plan of liquidation, which we believe will most likely maximize stockholder value. Since the Company’s public trading volume is very low, approximately 4,000 shares per day, there is no significant current market liquidity for our stockholders. With the adoption and implementation of this plan, significant cash could be distributed. The initial distribution could range between $78 million and $91 million, and our total distributions could range between $116 million and $133 million.’ |
