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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)
November 30, 1999
CAREY DIVERSIFIED LLC
(Exact name of registrant as specified in its charter)
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DELAWARE 001-13779 13-3912578
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(State of Organization) (Commission File No.) (IRS Employer
Identification
Number)
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50 Rockefeller Plaza, 2nd Floor
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New York, NY 10020
(Address of principal executive offices)
(212) 492-1100
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On November 30, 1999, the Board of Directors of Carey
Diversified LLC (the "Company") approved the terms of an agreement (the
"Proposed Agreement") with W.P. Carey & Co., Inc. and certain of its affiliates
(collectively "WP"), whereby WP will contribute certain assets relating to its
real estate investment advisory business to the Company by way of a merger with
and into a wholly-owned subsidiary of the Company (the "Merger"). The Merger is
subject to the approval of the shareholders of the Company. A consent
solicitation with respect to such shareholder approval will be filed with the
Securities and Exchange Commission as soon as practicable.
The combined Company ("WPC") will be renamed W. P. Carey & Co.
LLC. WPC expects to be listed on the New York Stock Exchange and the Pacific
Stock Exchange under the symbol "WPC".
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(C) EXHIBITS
The following exhibits are filed as part of this Current Report on Form 8-K:
EXHIBIT INDEX
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Exhibit No. Exhibit Page No.
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99.1 Press Release From Carey Diversified LLC
(November 30, 1999)
99.2 Presentation to Analysts
(November 30, 1999)
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly authorized.
CAREY DIVERSIFIED LLC
By: /s/ Francis J. Carey
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Francis J. Carey
Date: December 2 , 1999
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EXHIBIT 99.1
COMPANY CONTACT: MEDIA CONTACT:
Matthew B. Walley Donald W. Schuster
Carey Diversified LLC The Torrenzano Group Ltd.
212-492-8992 212-681-1700 ext. 103
CAREY DIVERSIFIED LLC TO MERGE WITH W. P. CAREY & CO.
WILL CREATE NATION'S DOMINANT NET LEASE COMPANY
NEW YORK, November 30, 1999 - Carey Diversified LLC (NYSE: CDC) today announced
that its Board of Directors has unanimously approved a merger with W. P. Carey &
Co, Inc. ("W. P. Carey"). W. P. Carey is a real estate investment firm which
manages a group of companies, including the Corporate Property Associates series
of private REITs, Carey Institutional Properties and Carey Diversified LLC. If
approved by the shareholders of Carey Diversified, assets under ownership or
management will increase from $750 million to approximately $2.5 billion post
merger. As a result, the merged entity ("WPC" or the "Company") will be a fully
integrated investment company and the nation's dominant net lease firm.
The Company expects to be listed on the New York Stock Exchange and the Pacific
Stock Exchange under the symbol "WPC." The combined business will be renamed W.
P. Carey & Co. LLC to capitalize on the strong corporate identity that W. P.
Carey has built among its clients and the investment community over the last 26
years. W. P. Carey personnel will become employees of the Company. All of the
operations of W. P. Carey & Co., Inc. will be contributed in exchange for 8
million shares of WPC. W. P. Carey stockholders may earn up to 2 million
additional shares of the Company over a period of up to five years, based upon
certain performance criteria.
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Carey Diversified's Board believes the proposed merger will significantly
enhance shareholder value through:
- IMMEDIATE ACCRETION - Expected to be accretive to the
company's per share FFO during the first year of combined
operations and more accretive thereafter;
- UNIQUE ACCESS TO CAPITAL - Capitalize on W. P. Carey's access
to private equity;
- ENHANCED GROWTH - Add the greater growth potential of W. P.
Carey's asset management business to the stability of CDC's
net lease investment revenues;
- STRENGTHENED CREDIT PROFILE - By acquiring W. P. Carey without
indebtedness, the financial ratios and flexibility of the
company will improve; and
- FUTURE GROWTH POTENTIAL - Leverage the Company's solid brand
image to provide new means of growth in the future.
William P. Carey will be the Chairman and Chief Executive Officer of the
combined Company. Gordon F. DuGan and John J. Park will continue to serve as
President and Chief Financial Officer, respectively. Francis J. Carey will
become Vice Chairman and remain on the Board.
William P. Carey, Chairman and Chief Executive Officer of W. P. Carey & Co.,
Inc. stated, "When a prominent securities analyst called W. P. Carey a 'bet on
brains,' he captured my vision for a Company built on talent, ambition and
innovation, but that is only part of the story. Our team is gifted and highly
motivated and, working within the framework of our long-term philosophy, will
continue to build value for our shareholders. I chose to take shares in WPC in
the merger because I believe in the future of this enterprise."
Carey Diversified's President, Gordon F. DuGan, stated, "We are merging in order
to provide our shareholders with the best of both worlds - stable income from
the net lease business and growth from the asset management business. We believe
strongly that the company resulting from this merger will be
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uniquely positioned to leverage our access to capital in the private markets to
generate superior shareholder returns."
Carey Diversified's Board of Directors formed a special committee of independent
directors to review and evaluate the potential merger. The special committee
retained Hogan & Hartson LLP as legal counsel and Robert A. Stanger & Co. as
financial advisors. Deutsche Bank Alex. Brown acted as financial advisor to W.
P. Carey & Co., Inc. and Skadden, Arps, Slate, Meagher & Flom acted as legal
counsel. Carey Diversified was represented by its counsel, Reed Smith Shaw &
McClay. It is anticipated that consent solicitation statements will be mailed to
shareholders in January 2000. Subject to shareholder approval of the merger, it
is expected that the transaction will close in second quarter of 2000.
Carey Diversified LLC is the largest limited liability company traded on the New
York Stock Exchange. The company's portfolio consists of 210 properties totaling
more than 20 million square feet. Carey Diversified LLC leases properties to
manufacturing, technology, retailing and communications companies including
Federal Express Corp., America West Airlines, Detroit Diesel, Dr Pepper Bottling
Company of Texas, Wal-Mart, AT&T, The Gap and more than 70 others. Additional
information about Carey Diversified LLC is available on the company's website:
http://www.careydiv.com.
W. P. Carey & Co, Inc. is a 26 year old investment firm which manages the W. P.
Carey Group of companies, including the Corporate Property Associates series of
REITs, which include CPA(R):10, CPA(R):12, CPA(R):14 and Carey Institutional
Properties and Carey Diversified LLC. Collectively, the Carey Group manages more
than 33 million square feet of property with an aggregate value of approximately
$2.5 billion. Additional information about W. P. Carey & Co, Inc. is available
on the company's website: http://www.wpcarey.com.
This press release contains forward-looking statements within the meaning of the
Federal securities laws. A number of factors could cause the Company's actual
results, performance or achievement to differ materially from those
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anticipated. Among those risks, trends and uncertainties are the general
economic climate; the supply of and demand for office and industrial properties;
interest rate levels; the availability of financing; and other risks associated
with the acquisition and ownership of properties, including the risk that the
tenants will not pay rent, or that costs may be greater than anticipated. For
further information on factors that could impact the Company, reference is made
to the Company's filings with the Securities and Exchange Commission.
###
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EXHIBIT 99.2
Slide 1
OVERVIEW OF THE
CAREY DIVERSIFIED LLC AND W. P. CAREY & CO., INC.
MERGER
[CAREY DIVERSIFIED LLC LOGO] November 30, 1999 [W. P. CAREY & CO., INC. LOGO]
Slide 2
OVERVIEW
Creation of the dominant net lease company that serves public and private
investors
BENEFITS:
- - Immediate Accretion
- - Unique Access to Capital
- - Enhanced Growth
- - Strengthened Credit Profile
- - Future Growth Potential
[W. P. CAREY & CO., INC. LOGO]
1
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Slide 3
TRANSACTION SUMMARY
- - W. P. CAREY & CO., INC. WILL CONTRIBUTE ALL OF ITS OPERATING ASSETS TO
CAREY DIVERSIFIED LLC ("CDC") IN EXCHANGE FOR 8 MILLION SHARES OF CDC
- - STOCKHOLDERS OF W. P. CAREY MAY EARN UP TO 2 MILLION ADDITIONAL SHARES
OF WPC OVER A PERIOD OF UP TO FIVE YEARS, BASED UPON CERTAIN
PERFORMANCE CRITERIA
- - W. P. CAREY PERSONNEL WILL BECOME EMPLOYEES OF THE COMPANY
[W.P. CAREY & CO., INC. LOGO]
2
Slide 4
TRANSACTION SUMMARY (CONT'D)
- - THE MERGED ENTITY WILL BECOME THE ADVISOR TO CORPORATE PROPERTY
ASSOCIATES 10, 12 AND 14 AND CAREY INSTITUTIONAL PROPERTIES
- - THE COMPANY WILL TRADE ON THE NYSE AND PSE UNDER THE SYMBOL "WPC"
- - EXPECTED TIMELINE
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Board Approval Consent Solicitation Expected Expected Closing
of Merger to Commence Date
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NOVEMBER 30 JANUARY 2000 APRIL 2000
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[W.P. CAREY & CO., INC. LOGO]
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Slide 5
PROPOSED COMPANY STRUCTURE
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PRE MERGER POST MERGER
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W. P. CAREY & CO. (PRIVATE) W. P. & CAREY & CO. LLC (PUBLIC)
manages net lease assets owns & manages net lease assets
[ARROW GRAPHIC]
CPA REITS CDC (PUBLIC) OWNS MANAGES
$850 MILLION $1.6 BILLION
NET LEASE ASSETS NET LEASE ASSETS
CDC ASSETS CPA/CIP
ASSETS
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[W.P. CAREY & CO., INC. LOGO]
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Slide 6
W.P. CAREY & CO. OVERVIEW
- - 20 YEARS OF DEMONSTRATED CAPITAL RAISING ABILITY IN ITS PRIVATE
INVESTMENT VEHICLES
- - CONSISTENTLY SUPERIOR PERFORMANCE OVER THE LAST 26 YEARS SERVING 65,000
INVESTORS, BOTH PUBLIC AND PRIVATE
- - STRONG CORPORATE IDENTITY BASED UPON LONG-TERM PRESENCE IN NET LEASE
FINANCING MARKET WITH OVER 400 CORPORATIONS
[W.P. CAREY & CO., INC. LOGO]
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Slide 7
W.P. CAREY & CO. OVERVIEW (CONT'D)
- - MANAGEMENT CONTINUITY AND EXPERIENCE, COMPLEMENTED BY A DISTINGUISHED
AND RENOWNED BOARD OF DIRECTORS:
MANAGEMENT TEAM:
- WM. POLK CAREY - Chairman of the Board and Chief Executive
Officer
- FRANCIS J. CAREY - Vice Chairman
- GEORGE E. STODDARD - Chief Investment Officer
- GORDON F. DUGAN - President
- JOHN J. PARK - Chief Financial Officer
INDEPENDENT DIRECTORS:
- EBERHARD FABER, IV - Former Director of the Federal Reserve
Bank of Philadelphia and Chairman of Eberhard Faber, Inc.
- DR. LAWRENCE R. KLEIN - Nobel Laureate in Economics, Benjamin
Franklin Professor of Economics and Finance (Emeritus),
University of Pennsylvania
- DONALD E. NICKELSON - Chairman of the Audit Committee, Former
President of PaineWebber, Inc.
- CHARLES C. TOWNSEND, JR. - Former Head of Corporate Finance,
Morgan Stanley & Co.
- REGINALD WINSSINGER - Chairman of Horizon New America National
Portfolio Inc.
[W.P. CAREY & CO., INC. LOGO]
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Slide 8
W.P. CAREY & CO. HISTORICAL OVERVIEW (CONT'D)
- - UNSURPASSED INVESTMENT EXPERTISE WITH INDEPENDENT INVESTMENT COMMITTEE:
- GEORGE E. STODDARD: Chairman of Investment Committee and Chief
Investment Officer, former head of corporate investments -
Equitable
- NATHANIEL S. COOLIDGE: former head of bond and corporate
finance department - John Hancock Mutual Life Insurance
Company
- FRANK J. HOENEMEYER: Vice Chairman of Investment Committee,
former Vice Chairman and Chief Investment Officer - Prudential
Insurance Company of America
- LAWRENCE R. KLEIN: Chairman of Economic Policy Committee,
Nobel Laureate in Economic Science and Benjamin Franklin
Professor of Economics, Emeritus - University of Pennsylvania
and Wharton School
[W.P. CAREY & CO., INC. LOGO]
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Slide 9
WPC/CDC MERGER BENEFITS
- - IMMEDIATE ACCRETION - The transaction is expected to be accretive to
the company's per share FFO during the first year of combined
operations and more accretive thereafter
- - UNIQUE ACCESS TO CAPITAL - Capitalize on W. P. Carey's access to
private capital. Raised $300 million over the past two years.
- - ENHANCED GROWTH - Combine the greater growth potential of asset
management business with the stability of net lease investment
revenues. Assets under management have grown from $1 billion in 1994 to
$2.5 billion.
- - STRENGTHENED CREDIT PROFILE - Market capitalization will increase by
over 30% without any increase in indebtedness.
[W.P. CAREY & CO., INC. LOGO]
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Slide 10
WPC/CDC MERGER BENEFITS
- - FUTURE GROWTH POTENTIAL - Leverage the Company's solid brand image to
provide new means of growth in the future
- - ELIMINATION OF PERCEIVED CONFLICT OF INTEREST - All operating
businesses will be merged and all personnel will become employees of
W.P. Carey & Co. LLC
- - POTENTIAL IMPROVED VALUATION - Preference by investment community for
fully integrated companies
[W.P. CAREY & CO., INC. LOGO]
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Slide 11
SUMMARY
- - CREATION OF THE DOMINANT NET LEASE COMPANY
- - IMMEDIATE ACCRETION TO FFO
- - POTENTIAL FOR SIGNIFICANT VALUATION IMPROVEMENT
[W.P. CAREY & CO., INC. LOGO]
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