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Exhibit 99.1
CONTACT:
DANIEL B. PLATT
CHIEF FINANCIAL OFFICER
TEL: 619-652-4700
FAX: 619-652-4711
[email protected]
BURNHAM PACIFIC ADOPTS PLAN OF LIQUIDATION
SIGNS AGREEMENT WITH PRUDENTIAL TO SELL FIFTEEN PROPERTIES FOR $355 MILLION IN
CASH
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SAN DIEGO, CALIF., SEPTEMBER 5, 2000 -- Burnham Pacific Properties, Inc.
(NYSE:BPP) today announced that its Board of Directors has approved the adoption
of a Plan of Liquidation and Dissolution under which the Company intends to sell
its real estate properties, to pay or provide for its liabilities and to
distribute its remaining cash to its preferred and common stockholders. Burnham
also announced today that it has signed an agreement for the sale of fifteen
properties to Prudential Real Estate Investors (PREI) for $355 million in cash.
The plan of liquidation is subject to the approval of the Company's
preferred stockholders, voting as a separate class, and the approval of the
common and preferred stockholders voting as a class, at the Company's upcoming
annual stockholders meeting. The sale of the properties to PREI is expected to
close shortly after the stockholders annual meeting and is subject to
stockholders' approval of the plan of liquidation and the satisfaction of
customary closing conditions.
In connection with its proposed liquidation, Burnham has revised its
arrangements with its preferred equity holders. The largest holder of preferred
units issued by the Company's operating partnership has exchanged approximately
1.6 million units for the same number of shares of a new Series C Preferred
Stock, and the holders of the Company's existing 2.8 million shares of Series A
Preferred Stock have exchanged those shares for the same number of shares of
Series C Preferred Stock. The terms of the Series C Preferred Stock and the
related agreement give the holders of the preferred stock the right to receive
their preference of $126 million from the net proceeds, subject to certain
reserves, of the sales of properties during the liquidation and to require
Burnham to redeem those shares in any event on or after September 30, 2001 for
the same amount. The holders of the new Series C Preferred Stock also have been
granted approval
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rights with respect to changes in the plan of liquidation and certain of the
steps which will be taken to implement it. The holders are entitled as a
separate group to elect two directors to the Company's Board of Directors, but
they have not as yet exercised this right.
The Company's agreement with the preferred stockholders permits Burnham
to pay ordinary dividends to the common stockholders, subject to certain
conditions and limitations, through the first quarter of 200l. Subject to
certain conditions, the preferred stockholders are required to vote for the plan
of liquidation and the slate of directors which the Company plans to nominate
for the upcoming stockholders meeting.
Under the terms of the purchase and sale agreement with PREI, the
properties will be purchased from Burnham by a joint venture created by PREI and
Developers Diversified Realty (NYSE: DDR) in 1998 called the Retail Value
Investment Program. Burnham received a fairness opinion from Houlihan Lokey
Howard & Zukin, a national investment banking firm, stating that the gross
consideration in the proposed sale is fair to Burnham from a financial
viewpoint. The fifteen properties, which combined total 2.9 million square feet,
consist of five centers with grocery anchors, seven power centers and three
specialty retail centers. Eleven of the properties are located in California,
and two each are in Washington State and Oregon. Burnham's other 44 properties
are located in California, Washington, Oregon, New Mexico and Utah.
Scott C. Verges, Burnham's President and interim Chief Executive
Officer, stated "The adoption of the plan of liquidation is a significant step
towards achieving our goal of maximizing shareholder value. We are also pleased
to have reached an agreement for the sale of the fifteen properties. The
transaction furthers our commitment to realizing the full value in the
liquidation of Burnham's assets. We will continue to pursue transactions that
recognize the quality of Burnham's assets."
The Board of Directors has amended the Bylaws of the Company to provide
that stockholder proposals and nominations for directors for the Company's
annual meeting must be presented to the Company not later than September 12,
2000.
Burnham Pacific Properties, Inc. is a real estate investment trust
(REIT) that focuses on value-added retail real estate opportunities. On a
quarterly basis, Burnham makes available supplemental information that includes
property and corporate level detail which is available
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upon request. More information on Burnham may be obtained by calling
800.462.5181, or visiting the Company's website at www.burnhampacific.com.
This news release contains forward-looking statements that predict or
indicate future events or trends or that do not relate to historical matters.
There are a number of important factors that could cause actual events to differ
materially from those indicated by such forward-looking statements. These
factors include, but are not limited to, uncertainties in the strategic
alternatives process, the Company's ability to consummate a binding agreement
with a third party to assist the Company in the liquidation and to consummate
binding agreements with prospective purchasers of its assets, as well as other
factors discussed in the Company's periodic reports filed with the Securities
and Exchange Commission, including the risk factors that were disclosed in our
Form 10-K that was filed with the SEC on March 30, 2000. You should be aware
that the risk factors contained in that Form 10-K may not be exhaustive.
Therefore, we recommend that you read the information in that Form 10-K together
with other reports and documents that we file with the SEC from time to time,
including our Forms 10-K, 10-Q and 8-K, which may supplement, modify, supersede
or update those risk factors.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
Burnham Pacific Properties, Inc. plans to mail a proxy statement to its
stockholders containing information about the plan of liquidation and the
election of directors. Investors and securityholders of Burnham Pacific
Properties, Inc. are advised to read the proxy statement carefully when it
becomes available because it will contain important information about the plan
of liquidation, the persons soliciting proxies related thereto and the election
of directors, their interests in the liquidation, and related matters. Investors
and securityholders may obtain free copies of the proxy statement (when
available) and other documents filed by Burnham at the Securities and Exchange
Commission's website at www.sec.gov.
Free copies of the proxy statement will also be available from Burnham by
directing such requests to the attention of Daniel B. Platt, Chief Financial
Officer, Burnham Pacific Properties, Inc., 110 West A Street, San Diego,
California 92101, telephone 619/652/4700.
INFORMATION CONCERNING PARTICIPANTS
Burnham, its directors, executive officers and certain other members of
management and employees may solicit proxies from Burnham stockholders in favor
of the plan of liquidation and the election of directors. As of the date of this
communication, the officers and directors of Burnham each beneficially own less
than 1% of the outstanding common stock of Burnham, other than Malin Burnham who
beneficially owns approximately 1.65%.
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