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Exhibit 99.1
NEWS RELEASE: JUNE 16, 2000
PACIFIC GATEWAY PROPERTIES TO BE ACQUIRED
BY MISSION ORCHARD STATUTORY TRUST
SAN FRANCISCO, CALIFORNIA . . . Pacific Gateway Properties, Inc. (PGP, AMEX)
today announced that it has entered into a definitive agreement to be acquired
by Mission Orchard Statutory Trust (the "Trust"), a private statutory trust
which is an affiliate of Integrated Capital Associates, Inc.
Under the terms of the agreement, Pacific Gateway Properties'
shareholders will receive at closing an initial cash payment of $12.60 per share
for all outstanding shares. The agreement provides for a reserve of
approximately $0.20 per share for certain additional potential adjustments
relating to transaction expenses, any potential unanticipated casualty losses
and changes in Pacific Gateway Properties' balance sheet at the time of closing.
Following a final reconciliation of all income and expenses related to the
transaction and the Company's operations up to the closing date a final payment
will be made. The final reconciliation process is expected to be completed
within 45 days of the initial payment. The Company projects that the total cash
consideration for the shareholders will be approximately $12.80 per share. The
terms of the agreement provide for a subsidiary of the Trust to merge into
Pacific Gateway Properties, with Pacific Gateway Properties becoming a wholly
owned subsidiary of Mission Orchard Statutory Trust.
Raymond Marino, President and Chief Executive Officer of Pacific Gateway
Properties, said, "We have explored a variety of options for Pacific Gateway
Properties and we are pleased that our shareholders will receive a premium to
our historic trading price. We believe that the return of shareholder capital at
a premium and at an opportune point in the real estate cycle represents a very
favorable transaction for the shareholders."
On June 14, 2000, Pacific Gateway Properties announced a second quarter
dividend of $0.15 per share for shareholders of record on June 26, 2000, which
will be paid on July 10, 2000. The second quarter dividend of $0.15 per share is
in addition to the merger consideration described above.
The board of directors of Pacific Gateway Properties has unanimously
approved the merger agreement. The merger agreement also has been approved by
the Trust. The merger is subject to customary closing conditions, including
approval by shareholders of Pacific Gateway Properties. It is anticipated that
the transaction will be closed in the fourth quarter of 2000.
Prudential Securities Incorporated is the financial advisor to Pacific
Gateway Properties in this transaction.
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The preceding information may contain forward-looking statements
concerning the Company's plans, objectives and expectations, including
statements concerning the transaction, the terms of the transaction and the
anticipated timing of closing. Reference is made to the discussions under the
caption "Management's Discussion and Analysis" in Pacific Gateway Properties
most recent Form 10-Q and Form 10-K concerning known and unforseen risks,
uncertainties and other factors that may cause actual results to differ
materially from those expressed or implied by such forward-looking statements.
ABOUT PACIFIC GATEWAY PROPERTIES:
Pacific Gateway Properties owns and manages 20 office buildings in the
San Francisco Bay Area, consisting of over 777,000 square feet representing 88%
of its portfolio of properties. Its San Francisco Bay Area properties are
located in San Jose, San Francisco and Walnut Creek. The balance of the Pacific
Gateway Properties' portfolio consists of two triple net leased office buildings
with an aggregate of 105,000 square feet located in Arizona and Florida
CONTACT:
Raymond V. Marino, President & Chief Executive Officer at (415) 398-4800,
ext. 119
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