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Exhibit 1
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Grubb & Ellis Company Announces Self Tender Offer for Up To Seven Million Shares
of Its Common Stock
Plan Gives Stockholders Opportunity to Recognize Value of Their Investment;
Allows Company to Continue to Execute Strategic Plan
NORTHBROOK, Ill., Dec. 4 /PRNewswire/ -- Grubb & Ellis Company (NYSE: GBE)
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today announced that its Board of Directors has approved a self tender offer for
up to 7 million shares (or approximately 35 percent) of the company's
outstanding common stock at a price of $7 per share. The price represents a 51
percent premium to the December 1, 2000 closing share price of $4.63. The tender
offer is expected to commence in approximately one week.
The aggregate purchase price, inclusive of transaction costs, will be
approximately $50 million. The company will finance the tender offer with
approximately $10 million of cash from operations and has a commitment letter
with its existing bank group for the remainder of the required funds.
"This offer allows us to enhance stockholder value over the long-term and
maintain the financial flexibility we need to continue to execute our strategic
plan. At the same time, it provides our stockholders with the opportunity to
divest a portion of their investments in Grubb & Ellis at a premium over the
recent stock price," said Reuben S. Leibowitz, Chairman of the Board. The tender
offer follows an intensive review and evaluation of the company's strategic
alternatives, including acquisitions and the potential merger or sale of the
company. "This process reinforced our belief that Grubb & Ellis is an industry
leader and our stock is an attractive investment opportunity. Therefore, we
believe that the interests of our stockholders, employees and clients are best
served at this time by Grubb & Ellis remaining independent," Leibowitz said. "We
are more convinced than ever that the investments we've made to broaden our
market coverage and breadth of services, invest in some of the industry's best
real estate professionals and build a state-of-the-art technology platform will
allow Grubb & Ellis to continue to produce consistent long-term earnings
growth."
As part of this announcement, the company said it is accelerating its
search for a Chief Executive Officer. It has retained the executive search firm
of Seiden Krieger Associates, Inc. to lead the process. Until a CEO is selected,
three members of senior management: Maureen A. Ehrenberg, President of Grubb &
Ellis Management Services, Inc.; John G. Orrico, President of Real Estate
Advisory Services; and Brian D. Parker, Executive Vice President, will continue
to manage the company's day-to-day activities.
The tender offer will be made available to all company stockholders, vested
option holders and warrant holders, including employee benefit plans. It will be
subject to various terms and conditions described in the tender offer materials
to be distributed to stockholders, including obtaining sufficient financing to
purchase the shares pursuant to the offer.
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The company's major stockholders, Warburg, Pincus Investors, L.P., The
Goldman Sachs Group, Inc., and C. Michael Kojaian and Mike Kojaian, have stated
they intend to fully participate in the tender offer. These stockholders
currently hold, in the aggregate, 14.2 million shares, or approximately 71
percent of the company's outstanding shares. Although their total shares owned
will be reduced, they will remain majority stockholders of the company following
the conclusion of the tender offer.
Since investing in the company, these strategic investors have played an
integral role in Grubb & Ellis' development to a full service real estate
provider. By fully supporting management's decision to invest significantly in
the company's infrastructure and acquisitions, they have allowed the company to
better serve its growing client base.
Grubb & Ellis expects that its strategic review, including the write-off of
certain deferred costs incurred in connection with amending its credit
facilities, will impact earnings in its fiscal second quarter ending December
31, 2000. As such, it expects to report earnings of approximately $.20 per
diluted share, which is below current analyst estimates.
Grubb & Ellis Company is one of the nation's largest commercial real estate
services firms. Through its offices, affiliates and global strategic alliance
with Knight Frank, one of the leading property consulting firms in Europe,
Africa and Asia Pacific, the company provides a full range of real estate
services, including advisory, management and consultative services, to users and
investors worldwide. With the collective resources of approximately 8,000 people
in over 200 offices in 27 countries, Grubb & Ellis professionals arrange the
sale or lease of such business properties as industrial, retail and office
buildings, as well as the acquisition and disposition of multi-family and
hospitality properties and commercial land. Major multiple-market clients have a
single point of contact through the firm's corporate and institutional units for
coordination of all of the firm's services as well as site selection,
feasibility studies, market forecasts and research. For more information, visit
the company's website at http://www.grubb-ellis.com.
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The tender offer that is described in this announcement has not yet
commenced. Once the tender offer commences, the Company will file a tender offer
statement (including an offer to purchase, letter of transmittal and related
tender offer documents) with the Securities and Exchange Commission upon
commencement of the offer. Grubb & Ellis stockholders should read the tender
offer statement when it becomes available because it will contain important
information about the offer. The tender offer statement and other filed
documents will be available at no charge on the SEC's website at
http://www.sec.gov and will also be made available without charge to all
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stockholders of the Company by contacting Morrow & Company at 212-754-8000, the
information agent for the offer.
Editor's note:
Except for historical information, statements included in this announcement may
constitute forward-looking statements regarding, among other things, market
outlook, future revenue growth, income, changes in expense levels, profitability
of acquired companies and effects on the company of changes in
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the real estate markets. These statements involve known and unknown risks,
uncertainties and other factors that may cause the company's actual results and
performance in future periods to be materially different from any future results
or performance suggested by these statements. Such factors which could adversely
affect the company's ability to obtain these results include, among other
things: (i) the volume of transactions and prices for real estate in the real
estate markets generally; (ii) a general or regional economic downturn that
could create a recession in the real estate markets; (iii) the company's debt
level and its ability to make interest and principal payments; (iv) an increase
in expenses related to new initiatives, investments in people, technology and
service improvements; (v) the success of new initiatives and investments; (vi)
the ability of the company to integrate acquired companies and assets; and (vii)
other factors described in the company's Form 10-K for the fiscal year ended
June 30, 2000, filed with the SEC.
SOURCE Grubb & Ellis Company
Web site: http://www.grubb-ellis.com
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Company News On-Call: http://www.prnewswire.com/comp/136726.html or fax, 800-
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758-5804, ext. 136726
CONTACT: Noeleen Colgan of Grubb & Ellis, 847-753-7594
