SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
September 7, 2001
Date of report (Date of earliest event reported)
G & L REALTY CORP.
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(Exact name of registrant as specified in charter)
Maryland 1-12566 95-4449388
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(State or Other Jurisdiction of (Commission File (IRS Employer Identification
Incorporation Number No.)
439 N. Bedford Drive, Beverly Hills, California 90210
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(Address of principal executive offices) (Zip code)
Registrant's telephone number including area code: (310) 273-9930
Not applicable.
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(Former name or former address, if changed since last report)
Item 5. Other Events.
On June 6, 2001, G&L Realty Corp. (the "Company") reported that Lyle Weisman and
certain of his associates (the "Weisman Group") had delivered to the special
committee of the board of directors a proposal to acquire, at the election of
the Company, either (i) all of the issued and outstanding common stock of the
Company for $15.00 per share or (ii) all of the assets of the Company (the
"Weisman Proposal").
On June 25, 2001, the Company reported that the Weisman Group had delivered to
the special committee a first amendment to the Weisman Proposal in which it
increased the price per share of common stock of the Company to $15.25 per share
and deleted the reference to purchasing the Company's assets.
On July 10, 2001, the Company reported that the Weisman Group had delivered to
the special committee a second amendment to the Weisman Proposal that: (i)
increased the price per share of common stock of the Company, if the Weisman
Group acquires 100% of such common stock, to $16.00 per share, subject to
satisfactory completion of customary corporate and legal due diligence, and with
a statement that the price per share would not be adjusted to less than $15.25
per share if the Weisman Group elected to continue with the transaction; and
(ii) offered to purchase, at the Company's election, less than all, but not less
than 50.1% of the Company's common stock on a fully diluted basis, at a price of
$15.25 per share, without a contingency for due diligence.
On July 19, 2001, the Company announced that the special committee had responded
in a letter addressed to the Weisman Group that it would be prepared to support
a proposal by the Weisman Group to acquire the Company in which: (i) all common
stockholders (other than the Weisman Group) received a price of not less than
$16.00 per share; (ii) there would be no contingencies for due diligence or
financing; (iii) the Weisman Group would make a nonrefundable payment of $2.5
million to the Company; and (iv) other requirements set forth in the response
were met.
On July 31, 2001, the Company announced that the special committee had received
a further amendment (the "Third Amendment") to the Weisman Proposal that: (i)
reaffirmed the Weisman Group's desire to acquire all, but not less than 50.1%,
of the Company's common stock; (ii) increased the proposed cash purchase price
per share to $16.35 per share, subject to satisfactory completion of customary
corporate and legal due diligence, or $15.35 per share without a contingency for
due diligence; (iii) conditioned the amended proposal on the negotiation and
execution of a definitive acquisition agreement and the termination of the
agreement and plan of merger dated as of May 10, 2001 between the Company and a
company owned by Daniel M. Gottlieb and Steven D. Lebowitz (the "Merger
Agreement"); and (iv) offered to deliver a deposit of $750,000 to counsel for
the special committee if the Company accepted the amended proposal, and to
increase the deposit by an additional $400,000 upon execution of a definitive
acquisition agreement, provided that the deposit would be refunded if the
transaction were unable to close prior to October 30, 2001, for any reason other
than a breach of the acquisition agreement by the Weisman Group.
On August 17, 2001, the special committee advised the Weisman Group that it was
unable to recommend to the full board of directors that it proceed with the
transaction outlined in the Third Amendment to the Weisman Proposal. The
special committee stated that the Third Amendment did not address its previously
expressed concerns that the proposed transaction could not be consummated
because Messrs. Gottlieb and Lebowitz and other stockholders would not support
it, and that the proposal did not provide for reimbursement of the Company for
losses it would incur in the event of a failed transaction.
On August 21, 2001, the special committee received a further amendment (the
"Fourth Amendment") to the Weisman Proposal to acquire all, but not less than
50.1%, of the Company's common stock. The Fourth Amendment: (i) offered to
deliver a deposit of $750,000 (the "Initial Deposit") to counsel for the special
committee, which would be credited towards the purchase price of the Company's
common stock, (ii) provided for, no later than three business days following
execution of a definitive agreement between the Company and the Weisman Group
(the "Acquisition Agreement"), an increase to the Initial Deposit by $1,750,000
for a total of $2,500,000 to be credited towards the purchase price of the
Company's common stock (such deposit, together with the Initial Deposit, the
"Good Faith Deposit") and (iii) provided that the Good Faith Deposit would
become non-refundable to the Weisman Group and be paid to the Company should no
transaction whereby holders of the common stock of the Company receive aggregate
consideration of $12.00 or more for each share of the Company's common stock
they own (regardless of the originator of such transaction) close within 12
calendar months from the date of execution of the Acquisition Agreement.
On September 5, 2001, the Company announced that the special committee had
advised the Weisman Group that it was unable to recommend to the full board of
directors that it proceed with the transaction outlined in the Weisman Group's
latest proposal made August 21, 2001. The special committee stated that it had
concluded that there was no reasonable possibility that the Weisman Group could
complete the acquisition of at least 50.1% of the outstanding common stock of
the Company as contemplated by the proposal.
On September 5, 2001, the special committee received a further amendment (the
"Fifth Amendment") to the Weisman Proposal that: (i) increased the proposed
cash purchase price per share to $15.50 per share without a due diligence
contingency, or $16.50 per share with a due diligence contingency, (ii) reduced
the minimum required threshold for the Weisman Group's proposal to acquire the
Company's common stock to 45.0% (inclusive of the shares of common stock owned
by the Weisman Group); and (iii) provided that the Company would promptly, upon
completion of a transaction with the Weisman Group, take such steps as may be
necessary or appropriate for delisting the shares of common stock from trading.
Execution of the Acquisition Agreement as contemplated by the Fifth Amendment
would require termination of the Merger Agreement with the company owned by
Messrs. Gottlieb and Lebowitz, and payment of the termination fee and reasonable
expenses of Messrs. Gottlieb and Lebowitz in accordance with the Merger
Agreement.
Special Committee Reaffirms Transaction With Messrs. Gottlieb and Lebowitz and
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Declines Latest Weisman Proposal
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On September 10, 2001, the Company announced that the special committee had
determined that the transaction contemplated by the Merger Agreement with the
company owned by Messrs. Gottlieb and Lebowitz providing for a merger in which
common stockholders of the Company would receive $12.00 per share continues to
be fair and reasonable to and in the best interests of the Company and its
unaffiliated common stockholders. The special committee reaffirmed its
recommendation that the Company consummate the transaction.
The special committee also advised the Weisman Group that it would not recommend
the Weisman Group's latest proposal dated September 5, 2001 to the full board of
directors. In considering the Weisman Group's latest proposal, the special
committee concluded that, since the latest proposal did not contemplate a
merger, it should be considered a proposal to make a tender offer for a minimum
of 45% of the Company's outstanding shares of common stock conditioned upon a
termination of the Merger Agreement. In reviewing the proposal, the special
committee considered a number of things, including the following:
(i) the Weisman Group's proposal was not in the form of an offer that the
Company could accept to create a legally binding contract; therefore, it
would require the Company to terminate the Merger Agreement in advance of
the existence of an obligation on the Weisman Group's part to deliver the
$2.5 million good faith deposit needed to reimburse the Company for the
costs that have been and would be incurred upon termination of the Merger
Agreement;
(ii) in the absence of any objective criteria for determining the purchase
price adjustments that would be applicable in the case of the proposed
$16.50 per share transaction in which due diligence was performed, the
special committee had to consider the proposal as at $15.50 per share;
(iii) based on expert advice, the special committee had concluded that it
is more likely than not that the Weisman Group would be unable to acquire
45% of the Company's outstanding common stock in a tender offer opposed by
Messrs. Gottlieb and Lebowitz who own approximately 42% of the Company's
outstanding common stock and have options to purchase an additional 167,000
shares, which they have advised the special committee they would do; the
only form of a tender offer that the special committee would be able to
recommend would be a tender offer made at an appropriate price, on an any
and all basis or subject to a minimum threshold that the special committee
determines is more likely than not to be satisfied, and with no
contingencies;
(iv) the special committee believed that there was a material risk that,
if the Merger Agreement were terminated and the Weisman Group did not meet
the 45% minimum threshold in its proposal, the Company's common stock would
trade at a significant discount from the $12.00 per share price specified
in the Merger Agreement, particularly
in light of the advice of the special committee's financial advisor engaged
in connection with the Merger Agreement that the range of values of the
Company's common stock is between $5.00 and $10.00 per share;
(v) the failure of the Weisman Group to provide the special committee
with any business plan or indication of its intentions with respect to the
future management or operation of the Company, notwithstanding numerous
requests from the special committee;
(vi) the fact that the Weisman Group did not need the approval or consent
of the special committee to conduct a tender offer; and
(vii) the special committee's concern that the continued lapse of time
would give rise to the right of Messrs. Gottlieb and Lebowitz to terminate
the Merger Agreement, leaving the Company's stockholders without an
opportunity to participate in any transaction.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
Exhibit Description
No.
99.1 Press release issued by G&L Realty Corp. on September 10, 2001.
99.2 Letter dated September 7, 2001 from S. Craig Tompkins, chairman of the
special committee, to the Weisman Group regarding their proposal to
acquire the common stock of the Company.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
G & L REALTY CORP.
By: /s/ David E. Hamer
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David E. Hamer
Chief Accounting Officer
DATED: September 10, 2001