Exhihit 99.1
PRESS RELEASE
AEGIS REALTY, INC. SIGNS DEFINITIVE MERGER AGREEMENT WITH
PHILLIPS EDISON, LTD
Aegis Stockholders to Receive $11.52 Per Share in Cash
NEW YORK, NY - December 24, 2002 - Aegis Realty Inc., ("Aegis"), (AMEX: AER)
today announced that it has entered into a definitive merger agreement with a
subsidiary of Phillips Edison, LTD ("PECO"), a privately held owner of
grocery-anchored community shopping centers, whereby Aegis will merge with and
into PECO. Pursuant to the merger agreement, PECO will acquire Aegis' entire
portfolio of shopping center assets, consisting of 28 community shopping centers
in 15 states, aggregating over 3.1 million square feet of gross leasable area.
As part of the total consideration that is being paid by PECO, each share of
Aegis' issued and outstanding common stock will be converted into the right to
receive $11.52 per share in cash.
This transaction is the result of a year-long process whereby Aegis and its
financial advisor, RBC Capital Markets ("RBC"), explored various alternatives
and conducted a broad-based marketing effort which resulted in the receipt of
numerous bids from potential buyers to effect the sale of Aegis and its assets.
"After an extensive process and a careful evaluation of the alternatives
generated by the RBC engagement, we believe this transaction will provide our
shareholders with the best combination of value and liquidity," said Stuart J.
Boesky, Chairman, Chief Executive Officer and President of Aegis.
Merger Terms
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The proposed transaction is structured so that Aegis will merge with and into a
subsidiary of PECO, with the PECO subsidiary being the surviving entity. PECO
will pay total consideration of up to $170.2 million, which includes the
purchase of all of Aegis' common stock, options to purchase common stock and the
operating partnership units of Aegis Realty Operating Partnership, L.P. ("OP
Units"), for approximately $101.8 million and the assumption of $68.4 million of
Aegis' debt. All of Aegis' common stock will be converted into the right to
receive $11.52 per share (as mentioned above), each holder of options to
purchase Aegis' common stock will be entitled to receive the difference between
$11.52 and the strike price of the option, and each holder of OP Units will have
the option to exchange the OP Units for common shares and receive $11.52 per
share or remain limited partners of the Operating Partnership.
PECO will pay the merger consideration in cash, utilizing a combination of
equity and debt.
Under the advisory contract between Aegis and Related Aegis, L.P., Aegis'
external advisor (the "Advisor"), and the property management agreement between
Aegis and RCC Property Advisors (the "Property Manager"), the Advisor and
Property Manager are entitled to receive termination fees in connection with the
merger. PECO, which is in the business of owning shopping center properties, did
not view Aegis' interests in the two partnerships which own garden apartment
complexes as core to its operations. To better facilitate a transaction, the
Advisor and the Property Manager agreed to accept the transfer of 100% of those
interests in the garden apartments in lieu of cash in satisfaction of all fees
due to them under their agreements. In addition, the Advisor has agreed to be
responsible for all fees due to RBC for their role as financial advisor to the
Board of Directors of Aegis. Aegis has retained an independent valuation firm to
assess the value of the garden apartment interests to confirm that their fair
market value is not more than the amounts due to the Advisor and Property
Manager (taking into consideration their obligation to pay the fees due to RBC).
Completion of the merger with PECO is subject to approval of Aegis stockholders
and normal closing conditions. In addition, until the closing, Aegis has agreed
to operate in accordance with certain budgets which may result in an adjustment,
up or down, to the amount of the merger consideration depending upon actual
operations and expenses. The merger has been approved unanimously by the Board
of Directors of Aegis and the transfer of the garden apartment interests to the
Advisor and Property Manager, has been unanimously approved by the independent
directors.
Financial Advisor
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Aegis was advised in this transaction by RBC Capital Markets, Inc. RBC has
issued an opinion that the consideration to be paid in the transaction is fair
to the Company and its stockholders from a financial point of view, subject to
the qualifications in such opinion.
Conference Call
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A conference call is scheduled for 9:00 a.m. Eastern Standard Time on Thursday,
December 26, 2002. Investors, brokers, analysts and stockholders wishing to
participate should call (800) 289-0485. For interested individuals unable to
join the conference call, replay of the call will be available through January
9, 2003 at (888) 203-1112. The Passcode is 463543.
About Aegis Realty
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Aegis Realty, a geographically diversified real estate investment trust, has
property holdings in 15 states. The Company's current portfolio includes direct
or indirect interests in 28 neighborhood shopping centers and two garden
apartment complexes. For more information, please contact the Stockholder
Services Department directly at (800) 831-4826.
Certain items in this press release may constitute forward-looking statements
within the meaning of the Private Litigation Reform Act of 1995 and as such may
involve known and unknown risks, trends, uncertainties and other factors which
may cause the actual results, performance or achievements to differ materially
from those expressed or implied by such forward-looking statements. With respect
to the proposed merger, there is the risk that PECO will not obtain the
financing necessary to consummate the merger notwithstanding the fact that it
has obtained commitments for such financing as described in the merger
agreement. Additional risks relating to the Company can be found in the
Company's filings with the Securities and Exchange Commission, including the
2001 Annual Report on Form 10-K and the proxy statement which will be delivered
to stockholders as part of the approval process. The Company expressly disclaims
any obligation or undertaking to release publicly any updates or revisions to
any forward-looking statements contained herein to reflect any changes in the
Company's expectations with regard thereto or change in events, conditions or
circumstances on which any such statement is based.
Important additional information will be filed with the SEC
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Aegis will be filing a proxy statement with the SEC in connection with the
above-described transaction. Investors and security holders are urged to read
the proxy statement because it will contain important information. The proxy
statement and other documents filed by Aegis with the SEC may be obtained when
they become available free of charge at the SEC's website (http://www.sec.gov).
Aegis, and its directors and officers, and the advisor, and the directors and
officers of its sole general partner, may be deemed to be "participants" in the
solicitation of proxies from Aegis stockholders in connection with the
transaction. These potential participants have interest in the
transaction, some of which could differ from those of Aegis stockholders
generally. Information about the directors and officers of Aegis and the general
partner of the advisor, including such individuals' ownership of Aegis shares,
is set forth in the proxy statement for Aegis' 2002 annual meeting of
stockholders (and is available at the SEC website listed above). Investors and
security holders may obtain additional information regarding the interests of
such potential participants by reading the proxy statement when it becomes
available.
AT AEGIS REALTY, INC.
Brenda Abuaf
Director of Shareholder Services
(800) 831-4826