<PAGE>
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): JANUARY 20, 1999
HORIZON GROUP PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
MARYLAND 0-24123 38-3407933
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
77 WEST WACKER DRIVE, SUITE 4200
CHICAGO, ILLINOIS 60601
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (312) 917-1500
(Former name or former address, if changed since last report)
<PAGE>
Item 5. OTHER EVENTS.
Horizon Group Properties, Inc. ("Horizon") announced that a purported
class action lawsuit was filed on January 20, 1999 in the Circuit Court of
Cook County, Illinois, against Horizon, Prime Capital Holdings, LLC ("Prime")
and the directors of Horizon claiming, among other things, that Horizon's
directors breached their fiduciary duties to Horizon's shareholders in
connection with a proposed business combination between Horizon and Prime.
As previously announced, on January 7, 1999, Horizon received a proposal from
Prime with respect to a proposed business combination pursuant to which Prime
would contribute certain assets to Horizon in exchange for shares of Horizon
common stock at a valuation of $7.00 per share. The Independent Directors of
the Board of Directors have authorized a review of the proposed transaction
as well as the selection and engagement of a financial advisor with respect
to the transaction and to determine whether its terms are fair to Horizon's
shareholders. The Independent Directors have engaged BT Alex.Brown,
Incorporated, to assist them in reviewing Prime's proposal and in exploring
other opportunities to enhance shareholder value. Horizon has not yet
responded to Prime's proposal.
The lawsuit requests that the transaction with Prime be enjoined, or, in
the event that the transaction is consummated, that the transaction be
rescinded and that damages be awarded to the purported class members.
Horizon believes that the lawsuit is without merit and intends to contest the
lawsuit vigorously.
The full text of the press release with respect to the lawsuit is
attached hereto as Exhibit 99.5.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Number Description
99.5 Press Release issued by the Company on January 27, 1999 regarding
a purported class action lawsuit filed on January 20, 1999 in the
Circuit Court of Cook County, Illinois against Horizon, Prime
Capital Holdings, LLC, and the directors of Horizon.
2
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
HORIZON GROUP PROPERTIES, INC.
(Registrant)
Date: January 28, 1999
By: /s/ Gary J. Skoien
----------------------
Name: Gary J. Skoien
Title: President and Chief Executive Officer
3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Number Description
<S> <C>
99.5 Press Release issued by the Company on January 27, 1999
regarding a purported class action lawsuit filed on January 20,
1999 in the Circuit Court of Cook County, Illinois against
Horizon, Prime Capital Holdings, LLC, and the directors of
Horizon.
</TABLE>
<PAGE>
EXHIBIT 99.5
FOR IMMEDIATE RELEASE CONTACT: Susan M. Crusoe
Senior Vice President,
Marketing
(312) 917-8877
HORIZON GROUP PROPERTIES REPORTS
CLASS ACTION LAWSUIT FILED AGAINST THE COMPANY
Shareholder Lawsuit Filed In Response to Business Combination Proposal
From Prime Capital Holding, LLC
(Chicago, Illinois - January 27, 1999) -- Horizon Group Properties,
Inc. (HGP) (NASDAQ: HGPI), an owner, operator and developer of factory outlet
and power centers, announced today that on January 20, 1999, a purported
shareholder of HGP filed a purported class action lawsuit in the Circuit
Court of Cook County, Illinois against Horizon Group Properties, Inc., Prime
Capital Holdings, LLC (PCH) and the Directors of HGP. The lawsuit claims,
among other things, that HGP's Directors breached their fiduciary duties to
HGP's shareholders in connection with a business combination proposal made by
PCH.
As previously announced on January 7, 1999, HGP received a proposal from
PCH with respect to a business combination proposal pursuant to which PCH
would contribute all of its assets to HGP in exchange for shares of HGP's
common stock at a valuation of $7.00 per share.
The Independent Directors of the Board of Directors of HGP have
authorized a review of the proposed transaction as well as the selection and
engagement of a financial advisor with respect to the transaction and to
determine whether its terms are fair to HGP's shareholders. The Independent
Directors have engaged BT Alex. Brown, Incorporated, to assist them in
reviewing PCH's offer and in exploring other opportunities to enhance
shareholder value. Horizon Group Properties, Inc. has not yet responded to
PCH's proposal.
The lawsuit requests that the transaction with PCH be enjoined, or, in
the event that the transaction is consummated, that the transaction be
rescinded and that damages be awarded to the purported class members.
Horizon Group Properties, Inc. believes that the lawsuit is without merit and
intends to contest the lawsuit vigorously.
Based in Chicago, Illinois, Horizon Group Properties, Inc. has 13
operating factory outlet centers and one power center in 11 states totaling
more than 2.9 million square feet.
###
SAFE HARBOR STATEMENT: THE STATEMENTS CONTAINED HEREIN WHICH ARE NOT
HISTORICAL FACTS ARE FORWARD-LOOKING STATEMENTS BASED UPON ECONOMIC
FORECASTS, BUDGETS, AND OTHER FACTORS WHICH, BY THEIR NATURE, INVOLVE KNOWN
RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE THE ACTUAL RESULTS,
PERFORMANCE OR ACHIEVEMENTS OF HORIZON GROUP PROPERTIES, INC. TO BE
MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS IMPLIED BY SUCH STATEMENTS. IN
PARTICULAR, AMONG THE FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY ARE THE FOLLOWING: BUSINESS CONDITIONS AND THE GENERAL ECONOMY,
COMPETITIVE FACTORS, INTEREST RATES AND OTHER RISKS INHERENT IN THE REAL
ESTATE BUSINESS. FOR FURTHER INFORMATION ON FACTORS WHICH COULD IMPACT THE
COMPANY AND THE STATEMENTS CONTAINED HEREIN, REFERENCE IS MADE TO THE
COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.
