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FOR FURTHER INFORMATION:
AT: BROOKDALE LIVING AT: FORTRESS BROOKDALE
COMMUNITIES, INC. ACQUISITION LLC
Mark J. Schulte Lilly H. Donohue
Chairman, President and Vice President of Fortress Investment
Chief Executive Officer Fund LLC
312-977-3700 212-798-6118
AT: EDELMAN PUBLIC RELATIONS
Kenneth G. Trantowski
Executive Vice President &
General Manager
312-240-2625
FOR IMMEDIATE RELEASE
July 26, 2000
BROOKDALE LIVING COMMUNITIES, INC. SIGNS
DEFINITIVE MERGER AGREEMENT WITH FORTRESS
BROOKDALE ACQUISITION LLC
STOCKHOLDERS TO RECEIVE $15.25 PER SHARE IN CASH
July 26, 2000 - Brookdale Living Communities, Inc. ("Brookdale") (Nasdaq:
BLCI), 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 5 1/2% 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
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approximately 9.9 million shares of common stock outstanding, including
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
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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 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:
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. 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 14D-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.
This news release contains certain forward-looking statements. When used in this
news release, the words "believes," "expects," "anticipates," "estimates" and
similar words or 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.
