UNITED STATES
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): October 22, 1998
LASALLE PARTNERS INCORPORATED
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(Exact name of registrant as specified in its charter)
Maryland 1-13145 36-4150422
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(State or other juris- (Commission File Number) (IRS Employer
diction of incorporation Identification
or organization) No.)
200 East Randolph Drive, Chicago, IL 60601
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (312) 782-5800
Not Applicable
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(Former name or former address, if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS
On October 22, 1998, LaSalle Partners Incorporated ("LaSalle") issued
a press release announcing that LaSalle and Jones Lang Wootton have reached
a definitive agreement to merge their operations. A copy of the press
release is filed as an exhibit to this Current Report on Form 8-K.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995:
Certain statements in this filing and elsewhere (such as in reports,
other filings with the Securities and Exchange Commission, press releases,
presentations and communications by the Company or its management and
written and oral statements) may constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance, achievements, plans and objectives of the Company to be
materially different from any future results, performance, achievements,
plans and objectives expressed or implied by such forward-looking
statements. Such factors are discussed in the Company's Registration
Statement (No. 333-25741), under "Risk Factors" and elsewhere, in the
Company's Annual Report on Form 10-K for the year ended December 31, 1997,
in Item 1. "Business", Item 7. "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and elsewhere, and in other
reports filed by the Company with the Securities and Exchange Commission.
These factors include, among other things, the following: (i) the impact
of general economic conditions and the real estate economic climate on the
Company's business and results of operations; (ii) the risk that property
management and investment management agreements will be terminated prior to
expiration or not renewed; (iii) the dependence of the Company's revenue
from property management and leasing services on the performance of the
properties managed by the Company; (iv) the risks inherent in pursuing a
selective acquisition strategy; (v) the concentration of the Company's
business in properties in central business districts; (vi) the risks
associated with the co-investment activities of the Company; (vii) the
seasonal nature of the Company's revenue, operating income and net
earnings; and (viii) the competition faced by the Company in a variety of
business disciplines within the commercial real estate industry. The
Company expressly disclaims any obligation or undertaking to update or
revise any forward-looking statements to reflect any changes in events or
circumstances or in the Company's expectations or results.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
The following exhibit is included with this Report:
Exhibit 99 Press release dated October 22, 1998 issued by LaSalle
Partners Incorporated and Jones Lang Wootton.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
LASALLE PARTNERS INCORPORATED
Date: October 22, 1998 By: /s/ WILLIAM E. SULLIVAN
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William E. Sullivan
Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
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Exhibit
Number Description
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99 Press release dated October 22, 1998 issued by LaSalle
Partners Incorporated and Jones Lang Wootton.
Exhibit 99
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NEWS RELEASE
FOR IMMEDIATE RELEASE
Contact Magnes Welsh Contact Julia Burge
Company LaSalle Partners Company Jones Lang Wootton
Telephone 312/228-2471 Oct. 22 Telephone 44-171-399-5590
All Other Days 44-171-399-5616
JONES LANG WOOTTON AND LA SALLE PARTNERS ANNOUNCE
INTENTION TO MERGE
Merger to Create Leading Global Real Estate Services and
Investment Management Company
CHICAGO AND LONDON, October 22, 1998 -- LaSalle Partners Incorporated
(NYSE: LAP) and Jones Lang Wootton today announced that they have reached a
definitive agreement to merge their operations to form the world's leading
fully integrated real estate services and investment management company.
The announcement was made by Stuart L. Scott, Chairman and Chief Executive
Officer of LaSalle Partners, and Christopher A. Peacock, Chief Executive
Officer of Jones Lang Wootton.
The transaction will combine Jones Lang Wootton's international
strengths in Europe and Asia Pacific with LaSalle's depth in North America
and its position as an investment management leader. The merged company's
balance of global investment management and real estate capabilities, in
addition to its geographic reach and integrated range of products and
services, will create a single source for addressing the comprehensive
global real estate needs of corporate clients.
The combined company will be a global leader in real estate management
services with more than 650 million square feet of office, retail and
industrial space under management. With approximately $20.3 billion
(<pound/sterling>11.9 billion) of assets under investment management, the
combined company will be among the largest real estate investment
management companies. The merged company will include more than 6,000
employees based in 34 countries in North and South America, Europe and Asia
Pacific.
The transaction, principally structured as a share exchange, has been
approved by the LaSalle Board of Directors and the Board of Directors of
the Jones Lang Wootton companies and the partnerships. Completion of the
transaction is subject to acceptance of the exchange offer by Jones Lang
Wootton shareholders and partners, approval by LaSalle shareholders,
regulatory and tax clearances, and other customary conditions. The
transaction is expected to close in early 1999, however, there can be no
assurance that the transaction will be completed. Under the terms of the
agreement, LaSalle Partners Incorporated will issue up to 14.3 million
shares of common stock, plus approximately $6.0 million (<pound/sterling>
3.5 million) in cash, subject to a closing net worth adjustment.
Approximately 12.5 million shares will be issued to Jones Lange Wootton
equity owners in the share exchange, and 1.8 million shares will be placed
in a discretionary trust and distributed to selected non-owner employees of
Jones Lang Wootton over a two-year period following the closing. The
shares issued in the share exchange will not be registered for U.S.
securities law purposes and will be subject to a one-year restriction on
sale.
-- more --
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LA SALLE PARTNERS AND JONES LANG WOOTTON ANNOUNCE MERGE -- Add Two
Jones Lang LaSalle expects to report the transaction on its financial
statements as follows:
. Approximately 7.6 million of the shares to be issued in the
transaction and approximately $5.6 million (<pound/sterling> 3.3
million) in cash will be accounted for using purchase accounting.
. The remaining 6.7 million shares and approximately $0.4 million
(<pound/sterling> 0.2 million) of cash is expected to be charged to
compensation expense in accordance with required treatment under
U.S. GAAP.
The actual amount of compensation expense recorded is dependent on
LaSalle's stock price and will increase or decrease based upon increases or
decreases in the Company's share price through year-end 2000. Assuming
that LaSalle's approximate current price remains constant through December
31, 2000, the Company estimates on a pro forma basis, a total charge to
compensation expense of approximately $195 million (<pound/sterling> 114.7
million) would be taken over the period between closing and December 31,
2000, with approximately $109.5 million (<pound/sterling> 64.4 million)
taken at closing and during the remainder of 1999 and an additional $85.5
million (<pound/sterling> 50.3 million) expensed over the year 2000. The
compensation expense is a non-cash charge and ultimately will have no
impact on the combined company's net equity position. The attached Table A
illustrates the timing and amount of the estimated charge to compensation
expense.
On a pro forma basis for 1997, the combined revenues of Jones Lang
Wootton and LaSalle Partners (including the acquisition of COMPASS
Management and Leasing and related companies as if it occurred on
January 1, 1997) would have totaled approximately $750 million
(<pound/sterling> 441 million), of which approximately 78 percent was
generated in North America and Europe. A breakdown of the percentage of
the Company's pro forma revenues by region is included on the attached
Table B.
On a pro forma basis for 1997, Jones Lang Wootton generated EBITDA of
approximately $48.7 million (<pound/sterling> 28.6 million) on revenues of
approximately $436.0 million (<pound/sterling> 256.5 million). Absent
extraordinary charges expected to be incurred for the compensation expense
described above and integration costs, the Company expects the transaction
to be accretive to both EBITDA and earnings per share in 1999.
Jones Lang Wootton provides a wide range of real estate advisory,
transactional and asset management services to local, national and
international clients in both the private and public sectors. Its services
cover many types of commercial real estate including hotel, industrial,
office and retail property.
During 1997, Jones Lang Wootton valued over $180 billion
(<pound/sterling> 105.9 billion) of commercial property, investment grade
residential property and land, and handled acquisitions and sales of real
estate assets totaling almost $20 billion (<pound/sterling>11.8 billion).
Worldwide, Jones Lang Wootton manages approximately 23 million square
metres (250 million square feet) of office, retail and industrial
properties which yield over $3 billion (<pound/sterling> 1.8 billion) of
annual rental income to their owners. It is also one of the largest
independent property investment managers in the U.K. and Ireland and has
approximately $6.3 billion (<pound/sterling> 3.7 billion) of real estate
funds under management worldwide.
-- more --
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LASALLE PARTNERS AND JONES LANG WOOTTON ANNOUNCE MERGER -- Add Three
LaSalle Partners' shares are listed on the New York Stock Exchange,
and the combined company is to consider seeking an additional listing on
the London Stock Exchange following completion of the transaction.
The combined company will be known as Jones Lang Lasalle Incorporated,
and the investment management business will be named LaSalle Investment
Management, Inc. The operational headquarters of the Jones Lang LaSalle
group will be located in London, while the holding company will remain
based in Chicago along with the investment management headquarters.
Mr. Scott will become Jones Lang LaSalle's Chairman and Chief
Executive Officer; and Mr. Peacock will be President and Deputy Chief
Executive Officer and will chair the Executive Management Committee, a non-
Board committee of senior executive officers. Michael J. Smith, currently
International Chairman of Jones Lang Wootton, will become Jones Lang
LaSalle's Deputy Chairman; and William E. Sullivan, currently Chief
Financial Officer of LaSalle Partners, will continue in that position with
Jones Lang LaSalle. Following the transaction, there will be equal
representation on the Board which will comprise eight inside directors and
six independent directors. The Executive Management Committee will also
have equal representation.
"Jones Lang LaSalle is a merger that realizes our mission to create
the Real Estate Services Firm of the Future," said Mr. Scott. "This merger
is one that both companies sought because we share the same vision of a
worldwide client-oriented service organization and have the same mission."
Mr. Scott added: "With this merger, our companies will put in place
the missing pieces of our global real estate delivery system, including a
Global Services Management organization with responsibility for assuring
that our clients receive consistent, high quality, best-in-class services
that are responsive to their individual needs worldwide. We will be able
to provide the highest level of service to our clients locally, regionally
and internationally, and we will increase our direct access to capital and
real estate markets worldwide. We believe this combination will expand
business-building opportunities in a manner which will enhance shareholder
value."
Mr. Peacock said: "LaSalle Partners and Jones Lang Wootton are perfect
merger partners, being ideally matched with complementary strengths in
geographic coverage, professional skills, research capabilities and product
range. Our clients worldwide will enjoy enhanced services through our
ability to provide a single source for real estate and investment
management needs. Jones Lang LaSalle will be dedicated to finding
innovative solutions to clients' needs and being at the forefront of real
estate and investment management services."
"Our employees will benefit from exciting career prospects as well as
greater opportunities to broaden their skills in what we believe will be
the industry's most innovative and significant global real estate services
firm," continued Mr. Peacock.
-- more --
<PAGE>
LASALLE PARTNERS AND JONES LANG WOOTTON ANNOUNCE MERGER -- Add Four
Jones Lang Wootton, which is headquartered in London where it was
first established in 1783, is a private business owned by its partners and
employees. The company employs more than 4,000 employees located in 32
countries in Europe, Asia, North America and Australasia.
LaSalle Partners is a leading vertically integrated global real estate
services firm providing management services, corporate and financial
services, and investment management services for public and private
institutions and other real estate owners and investors worldwide. Founded
in 1968 and headquartered in Chicago, LaSalle has been a public company
since July 1997 and is 44 percent owned by employees. Its 1997 annual
revenues on a proforma basis (including the acquisition of COMPASS
Management and Leasing and related companies as if it occurred on
January 1, 1997) would have totaled $317.8 million (<pound/sterling> 186.9
million).
LaSalle Partners is the largest U.S. provider of property management
services with approximately 400 million square feet of assets under
management and is a global leader in real estate investment management with
approximately $14 billion (<pound/sterling> 8.2 billion) of assets under
management. In 1997, its Corporate and Financial Services businesses
executed a total of 8.1 million square feet of tenant representation
assignments, completed investment banking transactions valued at
approximately $5.4 billion (<pound/sterling> 3.2 billion) and closed 56
land services transactions. More than 2,200 employees serve LaSalle's
clients across 10 corporate U.S. offices, nine offices outside the United
States, and nearly 500 property and satellite offices.
This press release does not constitute an offer or an invitation to offer
for LaSalle Partners Incorporated stock or an offer to purchase any real
estate securities.
Statements in this press release regarding, among other things, future
financial results and performance, achievements, plans and objectives may
be considered forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements involve known
and unknown risks, uncertainties and other factors which may cause actual
results, performance, achievements, plans and objectives of LaSalle
Partners to be materially different from those expressed or implied by such
forward-looking statements. Factors that could cause actual results to
differ materially include those discussed under "Risk Factors" and
elsewhere in LaSalle Partners' prospectus filed as part of its registration
statement (333-25741), under "Business," "Management's Discussion and
Analysis of Financial Condition and Results of Operations," and elsewhere
in LaSalle Partners' Annual Report or Form 10-K for the year ended
December 31, 1997 and in other periodic reports filed with the Securities
and Exchange Commission. Statements speak only as of the date of this
release. LaSalle Partners expressly disclaims any obligation or
undertaking to update or revise any forward-looking statements contained
herein to reflect any change in LaSalle Partners' expectations or results,
or any change in events. Statements in this press release regarding
parties other than LaSalle Partners are based upon representations of such
other parties.
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<PAGE>
LA SALLE PARTNERS AND JONES LANG WOOTTON MERGER ANNOUNCEMENT
Compensation Expense Charges and Revenue by Region
TABLE A
Estimated Combined Company "Extraordinary" Compensation Expense Breakdown
by Quarter (1)
Dollars Pound/sterling
1999 Q1 51.3 million 30.2 million
1999 Q2 17.2 million 10.1 million
1999 Q3 17.2 million 10.1 million
1999 Q4 23.8 million 14.0 million
2000 Q1 17.1 million 10.1 million
2000 Q2 17.1 million 10.1 million
2000 Q3 17.1 million 10.1 million
2000 Q4 34.2 million 20.0 million
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Total 195.0 million 114.7 million
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(1) The compensation charges illustrated in Table A assume that the
closing price of LaSalle Partners Incorporated common stock's approximate
current price remains constant throughout the period. The actual
compensation charges will be dependent upon LaSalle's stock price and will
increase or decrease based upon increases or decreases in the Company's
share price through year-end 2000.
TABLE B
Pro Forma Combined Company 1997 Percentage Revenue by Region
Europe 33%
North America 45%
Australia 10%
Asia and Other 12%
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Total 100%
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