Exhibit 99.1
NEWS RELEASE Contact: Kenneth B. Roath
James G. Reynolds
Health Care Property Investors, Inc.
949-221-0600/888-604-1990
Joseph P. Sullivan
Michael J. McGee
American Health Properties, Inc.
303-796-9793
HEALTH CARE PROPERTY INVESTORS, INC. SIGNS DEFINITIVE AGREEMENT TO
MERGE WITH AMERICAN HEALTH PROPERTIES, INC. IN A $1.0 BILLION
TRANSACTION -- CREATES INDUSTRY LEADER WITH APPROXIMATELY $3
BILLION IN TOTAL CAPITALIZATION
NEWPORT BEACH, CA. and DENVER, CO., August 4, 1999 -- Health Care
Property Investors, Inc. (NYSE:HCP) and American Health Properties,
Inc. (NYSE:AHE) announced today the signing of a definitive
agreement pursuant to which Health Care Property Investors will
merge with American Health Properties in a stock-for-stock
transaction. The stockholders of American Health Properties will
receive a fixed ratio of .78 share of Health Care Property
Investors common stock in exchange for each share of American
Health Properties common stock. Holders of American Health
Properties preferred stock will receive in exchange for each share
of American Health Properties preferred stock one share of
substantially similar Health Care Property Investors preferred
stock. The proposed transaction, valued at approximately $1
billion (including the assumption of $300 million in debt and
issuance of $100 million in preferred stock), will add American
Health Properties' 68 health care properties to Health Care
Property Investors' existing portfolio of 355 health care
properties, reinforcing Health Care Property
Investors' position as the nation's largest and most diversified
health care real estate investment trust (REIT). Health Care
Property Investors will maintain its current Board of Directors and
management team, and will remain at its existing headquarters in
Newport Beach, California.
The transaction, unanimously approved by the Boards of Directors of
both companies, is subject, among other things, to approval of the
shareholders of both companies and the registration of shares to be
issued in connection with the transaction. The transaction will be
treated as a purchase for financial accounting purposes, will be
tax-free to American Health Properties' shareholders and is
expected to close by the end of 1999. When completed, Health Care
Property Investors is expected to have a market capitalization of
$2.9 billion, based upon the closing share price on August 3, 1999,
and will own 423 properties in 44 states.
Health Care Property Investors' management believes that the merger
will be accretive to funds from operations per share in the first
year. It is anticipated that significant first-year overhead
savings can be achieved in the combined business, along with
additional property management and leasing synergies. Each company
expects to maintain its current dividend policy through the
closing. The estimated combined first year revenue stream will
break down as follows: 28% long-term care, 25% acute care
hospitals, 25% medical office buildings and clinics, 16% congregate
care and assisted living facilities and 6% rehabilitation
hospitals.
Kenneth B. Roath, Health Care Property Investors' Chairman and
Chief Executive Officer, stated, "We are extremely pleased to enter
into this transaction with American Health Properties. The
transaction will create the largest dedicated health care facility
portfolio in the REIT sector. It will add a number of the best
hospital assets currently owned in the sector, and a strong group
of medical office and physician clinic buildings to what is already
a well-diversified portfolio. The combined company will be the
industry leader with a $2.9 billion market capitalization. This
will provide greater liquidity and diversification to both equity
and debt investors. With over 400 properties in all health care
facility types, Health Care Property Investors will be well
positioned to take advantage of future opportunities."
Joseph P. Sullivan, American Health Properties' Chairman and Chief
Executive Officer, stated, "We are pleased to be able to align our
shareholders with the well diversified, high quality portfolio of
Health Care Property Investors. The scale and breadth of the
combined companies will better serve our investors and customers.
We are extremely pleased with American Health Properties' track
record of producing solid returns for our shareholders. We have
maintained a high degree of financial liquidity while creating one
of the strongest core portfolios in the industry. In the past
several years, we have added over $300 million of investments."
Merrill Lynch & Co. acted as financial advisor to Health Care
Property Investors, and Goldman, Sachs & Co. acted as financial
advisor to American Health Properties.
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Health Care Property Investors is an equity-oriented REIT which
invests directly or through joint ventures in health care related
facilities. HCPI's investment portfolio as of June 30, 1999,
includes 355 facilities in 43 states and a gross investment value
of $1.7 billion. Its investments include 155 long-term care
facilities, 85 congregate care and assisted living facilities,
eight acute care hospitals, six freestanding rehabilitation
hospitals, 53 medical office buildings, 47 physician group practice
clinics and a psychiatric care center.
American Health Properties is a REIT specializing in health care
facilities. It has gross investments of over $810 million in acute
care, rehabilitation and long-term acute care hospitals and
assisted living, skilled nursing, Alzheimer's care and medical
office/clinic facilities located in 22 states.
Statements in this news release that are not historical may contain
forward-looking statements subject to risks and uncertainties,
including that the conditions to closing for the merger may not be
satisfied or waived, some transactions that Health Care Property
Investors and American Health Properties expect to close may close
later than expected or not at all, competition for the acquisition
and financing of health care facilities, and changes in economic
conditions, including changes in interest rates and the
availability and cost of capital, described from time to time in
the SEC reports filed by Health Care Property Investors and
American Health Properties.