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Exhibit (a)(1)(h)
WEDNESDAY JULY 26, 8:55 PM EASTERN TIME
COMPANY PRESS RELEASE
SOURCE: Brookdale Living Communities, Inc.
BROOKDALE LIVING COMMUNITIES, INC.
SIGNS DEFINITIVE MERGER AGREEMENT WITH FORTRESS
BROOKDALE ACQUISITION LLC
STOCKHOLDERS TO RECEIVE $15.25 PER SHARE IN CASH
CHICAGO, July 26/PRNewswire/ -- Brookdale Living Communities, Inc. ("Brookdale")
(Nasdaq: BLCI - news), a leading provider of senior and assisted living services
to the elderly, and Fortress Brookdale Acquisition LLC ("Purchaser"), a joint
venture owned by an affiliate of Fortress Investment Fund LLC ("Fortress") and
an affiliate of Capital Z Partners ("Health Partners"), today announced that
they have signed a definitive merger agreement providing for the acquisition of
all of Brookdale's outstanding shares of common stock not already owned by
Purchaser for $15.25 per share in cash. As previously announced, in May 2000,
Purchaser purchased approximately 39.9% of Brookdale's outstanding common stock
from a principal stockholder of Brookdale for $15.00 per share. Health Partners
has also agreed to contribute to the Purchaser its $100,000,000 52% Convertible
Subordinated Note due 2009 issued by Brookdale which is convertible into
approximately 5.5 million shares of Brookdale's common stock.
The all-cash transaction, which is structured as a $15.25 per share cash tender
offer followed by a second-step merger of Brookdale with a subsidiary of
Purchaser, is valued at approximately $91 million excluding shares already owned
by Purchaser. The tender offer is expected to commence on August 1, 2000 and
conclude on September 5, 2000. Brookdale has approximately 9.9 million shares of
common stock outstanding, including
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approximately 4.0 million shares owned by Purchaser. Brookdale's Board of
Directors, acting upon the unanimous recommendation of a committee of
independent directors composed entirely of non-management directors (the
"Independent Committee"), recommends that the stockholders of Brookdale (other
than Purchaser and its affiliates) tender their shares pursuant to the tender
offer. The Independent Committee and the Brookdale Board received an opinion
from Merrill Lynch & Co., the Independent Committee's financial advisor, to the
effect that the $15.25 per share price in the tender offer and the merger is
fair to the stockholders of Brookdale (other than Purchaser and its affiliates)
from a financial point of view.
"This merger announcement is exciting for several reasons," said Mark J.
Schulte, Chairman, President and Chief Executive Officer of Brookdale. "We
believe that this transaction maximizes existing stockholder value by giving
stockholders a 40% premium to where our stock was trading prior to the
announcement of Purchaser's initial purchase in April 2000. This transaction
also secures the sponsorship of two major private equity funds to continue
Brookdale's growth which is particularly important given the current weakness
in the public markets with respect to assisted living and health care
companies."
"We are very pleased to be making this investment in Brookdale," said Wesley R.
Edens, Chairman and Chief Executive Officer of Fortress. "We firmly believe
Brookdale's strong management team under Mark's continuing leadership, solid
operations, urban focus and high quality real estate positions Brookdale to be a
consolidator and major player in the near and long term."
Day-to-day operations of Brookdale will not change following the acquisition
despite the change in ownership. The Company's current leadership team will
remain intact with Mark Schulte continuing in his role as Chairman, President
and Chief Executive Officer of Brookdale.
The tender offer and merger will be subject to certain customary conditions;
however, the tender offer is not subject to a financing condition or a
condition that any minimum number of shares be tendered. In addition, the
waiting period under the Hart-Scott-Rodino Act was satisfied in connection with
Purchaser's initial purchase of Brookdale stock in May 2000.
Purchaser will be paid an expense reimbursement payment of $750,000 in the
event that the Independent Committee receives a higher offer from a third party
and accepts that offer pursuant to the exercise of its fiduciary duties. Other
than the expense reimbursement payment, no other "break-up" or "commitment"
fee would be payable in such event.
Fortress is a real estate opportunity fund located in New York with over $870
million of private equity capital. Fortress focuses on real estate-related
investments worldwide.
Based in New York, Capital Z Financial Services Fund II, L.P. (the general
partner of Health Partners) is a $1.85 billion global private equity fund that
focuses exclusively on
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investments in the insurance, financial services and health care services
industries. The fund, which was formed in August 1998, is managed by Capital Z
Partners, a global alternative asset management firm headquartered in New York
City with offices or affiliates in London and Hong Kong. Capital Z Partners also
manages Capital Z Investments, L.P., a $1.5 billion fund which focuses
exclusively on investments in private equity funds, hedge funds and other
alternative investment vehicles. Since 1990, Capital Z Partners and its
predecessor funds have invested in excess of $1.5 billion in over 50
transactions with an aggregate market value in excess of $12 billion.
In addition, Brookdale today announced it had signed a definitive agreement to
purchase four of the facilities that Brookdale currently leases and operates
from the lessor, an affiliate of Senior Housing Properties Trust, for $123
million. The facilities to be purchased consist of The Hallmark, located in
Chicago, Illinois, The Springs of East Mesa, located in Mesa, Arizona, The
Gables at Brighton, located in Brighton, New York, and Park Place, located in
Spokane, Washington, and in the aggregate contain 837 units. In accordance with
the purchase agreement, Brookdale is required to make a $12.3 million earnest
money escrow deposit, creditable against the purchase price, and the purchase
must be completed by October 31, 2000.
The tender offer for the outstanding shares of common stock of Brookdale
described in this announcement has not yet commenced, and this announcement is
neither an offer to purchase nor a solicitation of an offer to sell securities.
The tender offer will be made only through purchaser's offer to purchase and
the related letter of transmittal. We urge investors and security holders to
read the following documents when they become available, regarding the tender
offer and the merger (described above), because they will contain important
information:
-- Purchaser's tender offer statement on schedule to including the
offer to purchase, letter of transmittal and notice of guaranteed
delivery
-- Brookdale's solicitation/recommendation statement on schedule 14-D-9.
These documents and amendments to these documents will be filed with the United
States Securities and Exchange Commission when the tender offer commences. When
these and other documents are filed with the SEC, they may be obtained free at
the SEC's web site at www.sec.gov. You may also obtain for free each of these
documents (when available) from the information agent for the offer, to be
announced.
Brookdale Living Communities, Inc. is a leading national provider of senior and
assisted living services to the elderly, with 24 facilities in 14 states
containing an aggregate of approximately 5,328 units in urban and suburban
communities. Additional information is available on Brookdale's web site at
www.brookdaleliving.com.
The news release contains certain forward-looking statements. When used in this
news release, the words "believes," "expects," "anticipates," "estimates" and
similar words or
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expressions are generally intended to identify forward-looking statements. These
forward-looking statements involve risks and uncertainties, such as the risks
detailed in Brookdale's filings with the Securities and Exchange Commission.
For more information contact: Mark J. Schulte, Chairman, President and Chief
Executive Officer of Brookdale Living Communities, 312-977-3700; or Lilly H.
Donohue Vice President of Fortress Investment Fund LLC of Fortress Brookdale
Acquisition LLC, 212-798-6118; or Kenneth G. Trantowski, Executive Vice
President & General Manager of Edelman Public Relations, 312-240-2625, for
Brookdale Living Communities.
