Equity Residential Receives Extension on Potential Archstone Deal
Equity Residential reached an agreement with affiliates of Bank of America and Barclays PLC to extend to April 19, 2012 the period during which the company has the exclusive right to contract with the sellers to acquire their remaining 26.5 percent interest in Archstone - a privately-held owner, operator and developer of multifamily apartment properties.
As part of the extension agreement, the minimum price at which the Sellers are obligated to contract with Equity Residential to sell this interest in Archstone was increased to $1.485 billion. If Equity Residential offers a price of $1.485 billion or more and the interest is sold to the other Archstone owner under its right of first offer, the company will receive a breakup fee of $80 million. Equity Residential remains under no contractual obligation to acquire this interest in Archstone.
Lehman Brothers retains a right of first offer on the interest in Archstone.
Equity had entered in a contract to buy a separate stake of Archstone in early December. But in January, Lehman Brothers excercised its right of first offer to purchased that stake for $1.325 billion.
Prior to the Lehman deal in January, Barclays and Bank of America owned 53 percent of Archstone, with Lehman controlled the other 47 percent. Now Lehman holds 73.5 percent while Barclays and Bank of America, at least temporarily, retain a 26.5 percent stake.
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© 2012 Penton Media Inc.
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