SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 17, 1998
HIGHWOODS PROPERTIES, INC.
(Exact name of registrant specified in its charter)
Maryland 1-13100 56-1871668
(State of Incorporation) (Commission File Number) (IRS Employer Identification No.)
3100 Smoketree Court, Suite 600, Raleigh, North Carolina 27604
(Address of principal executive offices, zip code)
Registrant's telephone number, including area code: (919) 872-4924
Item 5. OTHER EVENTS
As previously reported, Highwoods Properties, Inc,. ("Highwoods") has
entered into an Agreement and Plan of Merger (as amended, the "Merger
Agreement') with J. C. Nichols Company ("JCN"). The merger (the "Merger") is
subject to the approval of the shareholders of JCN at its special meeting
scheduled for July 1, 1998. On June 17, 1998, the Board of Directors of JCN
received a letter from Blackacre Capital Management, LLC ("Blackacre") which
indicated that Blackacre would like to acquire JCN at $70.00 per share in a cash
merger, subject to (i) the completion of due diligence, (ii) the termination of
the Merger Agreement by the Board of Directors of JCN under circumstances that
would not cause the break-up fee and expense reimbursement payable to Highwoods
to exceed $2.5 million, and (iii) "certain structuring for tax advantages" to
the JCN shareholders. Blackacre requested access to the books and records of JCN
and indicated that if such information establishes a higher valuation for JCN,
Blackacre would be willing to consider increasing its offer. A copy of the
letter is attached hereto as an exhibit.
Highwoods has been informed by JCN that JCN responded to Blackacre's
letter with a request for additional information regarding Blackacre's purported
offer, including a list of the information Blackacre desired to review and a
more detailed description of the structure of the proposed transaction. In a
letter dated June 19, 1998, Blackacre provided some of the information requested
by JCN, and indicated its intention not to commence its due diligence until the
Merger Agreement is terminated. A copy of that letter is attached hereto as an
exhibit.
The JCN Board of Directors has expressed concern about certain aspects
of Blackacre's offer, including that (a) the transaction structure Blackacre
contemplates should not be attempted without IRS approval, and (b) Blackacre
will not commence its due diligence until after the Merger Agreement is
terminated, meaning that Blackacre would not be obligated to make any offer in
the event the Merger is not approved by JCN shareholders. The JCN Board of
Directors has expressed its belief that the Merger serves the best interests of
JCN shareholders.
Blackacre, which owns approximately 14% of the outstanding shares of
the common stock of JCN, also indicated that it currently intends to vote
against the Merger Agreement at the upcoming JCN special meeting and to exercise
its appraisal rights for its shares of JCN common stock. Under the Merger
Agreement, up to 40% of the shares of JCN common stock may be exchanged for cash
in the Merger; the other shares of JCN would be exchanged for shares of
Highwoods common stock. Therefore, if the Merger is effected and Blackacre does
in fact perfect its dissenters' rights, it would reduce the amount of cash
available to shareholders who elect to receive cash for some or all of their
shares. Shareholders of JCN are urged to see the discussion of the impact of the
perfection of appraisal rights on the components of the Merger consideration
under the caption "The Merger -- Terms of the Merger" in the Proxy
Statement/Prospectus and into which this Form 8-K is incorporated by reference.
Item 7. EXHIBITS
(c) Exhibits
99.1 Letter from Blackacre to JCN Board of Directors,
dated June 17, 1998
99.2 Letter from Blackacre to Mr. Barrett Brady, dated
June 19, 1998
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HIGHWOODS PROPERTIES, INC.
By: /s/ Carman J. Liuzzo
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Carman J. Liuzzo
Vice President and Chief Financial Officer
Date: June 22, 1998