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 11, 1998
MEDITRUST CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 95-3520818
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
197 First Avenue, Suite 300
Needham, MA 02194
(address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (781) 433-6000
MEDITRUST OPERATING COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 96-3419438
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
197 First Avenue, Suite 100
Needham, MA 02194
(address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (781) 453-8062
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Item 5. Other Events
On January 11, 1998, Meditrust Corporation ("Reitco"), Meditrust
Operating Company ("Opco", and together with Reitco, "Registrant") and
Cobblestone Holdings, Inc. ("Cobblestone") announced that they have entered into
an Agreement and Plan of Merger dated as of January 11, 1998 (the "Merger
Agreement"), pursuant to which Cobblestone will merge with and into Registrant
(the "Merger"). Under the terms of the Merger Agreement, Registrant will acquire
all of the outstanding common stock of Cobblestone for paired shares of
Registrant, and all of the outstanding preferred stock of Cobblestone for paired
shares of Registrant and/or, at Registrant's option, cash, with an aggregate
value of approximately $241,000,000. The number of paired shares of Registrant
to be issued in exchange for each outstanding share of common and preferred
stock of Cobblestone, and the aggregate value of total Merger consideration, are
subject to adjustment in the manner described in the Merger Agreement. In
addition, approximately $154,000,000 of Cobblestone debt and associated costs
will be refinanced or assumed as a condition of closing. The Merger, which is
expected to be completed in the first quarter of 1998, is subject to customary
closing conditions.
The Registrant issued a press release announcing the Merger
Agreement on January 12, 1998, which is filed herewith as Exhibit 99 and is
incorporated herein by reference.
Item 7. Financial Statement and Exhibits.
(a) Financial Statements.
None.
(b) Financial Information.
None.
(c) Exhibits.
See the index to Exhibits attached hereto.
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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.
Date: January 13, 1998 MEDITRUST CORPORATION
By: /s/ David F. Benson
---------------------------------------------
(Signature)
Name: David F. Benson
Title: President
MEDITRUST OPERATING COMPANY
By: /s/ Abraham D. Gosman
---------------------------------------------
(Signature)
Name: Abraham D. Gosman
Title: Chief Executive Officer
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Exhibit No. Description
- ----------- -----------
99.1 Press release dated January 12, 1998 issued
by Registrant, announcing the execution and
delivery of the Merger Agreement.
1
PRESS RELEASE The Meditrust Companies
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197 First Avenue Needham, Massachusetts 02194-9127 (781) 433-6000
Fax (781) 433-1290
FOR IMMEDIATE RELEASE
Contacts:
Elaine Quinlan Dan Katcher/Sabrina Walheim
Meditrust Abernathy MacGregor Frank
(781) 433-6000 (212) 371-5999
MEDITRUST TO ACQUIRE COBBLESTONE HOLDINGS
PARENT OF COBBLESTONE GOLF GROUP
FOR $241 MILLION
Meditrust Intends to Accelerate Cobblestone's Plans
For Golf Course Acquisitions
Needham, MA, (January 12, 1998) -- The Boards of Directors of The
Meditrust Companies ("Meditrust")(NYSE: MT) announced today that they have
signed a definitive merger agreement with Cobblestone Holdings, Inc., parent of
Cobblestone Golf Group, Inc., ("Cobblestone"), under which Meditrust will
acquire all of the outstanding preferred and common stock of Cobblestone for
Meditrust stock valued at approximately $241 million. In addition, under the
terms of the agreement, approximately $154 million of Cobblestone debt and
associated costs will be either refinanced or assumed as a condition of closing.
The transaction will position Meditrust as a leading consolidator in
the golf industry and contribute to the growth of the combined entity in the
first year after closing. With the acquisitions of Cobblestone and La Quinta
Inns, Inc., Meditrust will have a total market capitalization of approximately
$8 billion.
Based in Del Mar, California, Cobblestone is a privately held
company and one of the leading owners and operators of golf courses in the
United States. Cobblestone has a portfolio of 25 facilities with 29 courses in
major golf markets in Arizona, California, Florida, Georgia, Texas and Virginia.
The portfolio includes eleven private country clubs, six semi-private clubs and
eight daily fee courses. The company has achieved significant growth in revenues
and EBITDA since its formation in 1992.
Following the transaction, James "Bob" Husband, president and chief
executive officer of Cobblestone, will continue to serve in his current capacity
as president and
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CEO of Cobblestone. Cobblestone's headquarters will remain in Del Mar,
California and its properties will continue to be operated by Cobblestone
management.
Abraham D. Gosman, chairman of the boards of directors of The
Meditrust Companies, said, "This transaction with Cobblestone adds leisure to
the lodging platform that Meditrust established with the announcement of the La
Quinta acquisition. With Bob Husband and his group, we gain an excellent
management team to speed the rapid consolidation of this sector. We envision
Cobblestone as the core of a number of golf-related acquisitions that we at
Meditrust have planned in this extremely fragmented industry."
Mr. Gosman continued, "Cobblestone has successfully increased cash
flows at its facilities by increasing membership and revenues per customer,
controlling operating costs, upgrading courses and related facilities and
optimizing non-golf profit centers. In addition, Cobblestone has an outstanding
track record of improving the financial performance of each golf course it has
acquired. On average, Cobblestone has improved the course level EBITDA during
the first twelve months of Cobblestone ownership by an average of more than 125%
over the twelve months immediately prior to Cobblestone ownership."
Bob Husband, president and chief executive officer of Cobblestone,
said, "Cobblestone management believes that the company's superior track record
for revenue growth and high margins is the result of our ability to provide a
high-quality golf and recreational experience to every customer. I am delighted
that Meditrust intends to accelerate Cobblestone's plans for future golf course
acquisitions.
"Cobblestone strives to attain the highest standards in the golf
course management industry with regard to customer service, quality of
facilities and courses, and professionalism and competency of the staff. This
transaction with Meditrust allows Cobblestone to maintain these high standards
of quality and to pursue its comprehensive marketing and merchandising strategy
aimed at increasing club membership and course utilization," concluded Mr.
Husband.
David H. Wong, a general partner at Brentwood Associates, the
private equity firm that co-founded Cobblestone, noted, "We believe Cobblestone
is an excellent example of the partnership of capital and management
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successfully generating fundamental value creation through acquisitions and
internal growth. We are very pleased with the outstanding returns produced by
this investment for our limited partners, and we are delighted to be receiving
Meditrust stock in this transaction. Furthermore, with this transaction we
believe we have provided Cobblestone a partner with the resources to achieve
management's goal of becoming the leading owner/operator of golf courses in the
United States."
Meditrust noted that the Cobblestone transaction will have no
significant impact on the terms or timetable for the closing of the transaction
with La Quinta Inns, Inc., announced on January 4, 1998. The Cobblestone
transaction is anticipated to close in mid- to late February 1998.
Salomon Smith Barney, Inc. acted as financial adviser to Meditrust,
and Donaldson, Lufkin & Jenrette Securities Corporation acted as financial
adviser to Cobblestone.
The Meditrust Companies, a paired share real estate investment trust
and the nation's largest health care real estate investment trust, with
headquarters in Needham, Massachusetts, consists of Meditrust Corporation and
Meditrust Operating Company. Meditrust has investments in over 500 health care
facilities in 41 states with 38 different operators and presently has a total
market capitalization in excess of $4.5 billion.
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Certain matters discussed within this press release may constitute
forward-looking statements within the meaning of the federal securities laws.
Although Meditrust believes the statements are based on reasonable assumptions,
the company can give no assurance that its expectations will be attained. Actual
results and the timing of certain events could differ materially from those
projected in or contemplated by the forward-looking statements due to a number
of factors, including, without limitation, general economic and real estate
conditions, the availability of equity and debt financing for acquisitions and
renovations, interest rates, competition in a given market and other risks
detailed from time to time in the filings of Meditrust Corporation and Meditrust
Operating Company with the Securities and Exchange Commission, including
quarterly reports on Form 10-Q, reports on Form 8-K and annual reports on Form
10-K.
