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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): DECEMBER 9, 1997
CB COMMERCIAL REAL ESTATE SERVICES GROUP, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 0-18525 52-1616016
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(STATE OR OTHER (COMMISSION FILE (IRS EMPLOYER
JURISDICTION OF NUMBER) IDENTIFICATION NO.)
INCORPORATION)
533 SOUTH FREMONT AVENUE - LOS ANGELES, CALIFORNIA 90071
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (213) 613-3123
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 5. OTHER EVENTS.
On December 9, 1997, CB Commercial Real Estate Services Group, Inc. (the
"Company") issued a press release announcing that it has entered into an
agreement as to the terms of a merger with REI Ltd., the holding company for all
Richard Ellis operations outside of the United Kingdom. The press release is
filed as an exhibit hereto.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
The following is furnished as exhibits to this report:
99 Press release dated December 9, 1997 issued by CB Commercial Real
Estate Services Group, Inc.
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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 thereunto duly authorized.
CB COMMERCIAL REAL ESTATE SERVICES
GROUP, INC.
Date: December 9, 1997 By: /s/ Ronald J. Platisha
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Ronald J. Platisha
Executive Vice President
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EXHIBIT 99
NEWS
from America's Leading Commercial Real Estate Services Company
Contact: CB Commercial
Cary Brazeman
(213) 613-3227
Sitrick and Company
Michael Sitrick
Anne DeWolfe
(310) 788-2850
BOARDS OF CB COMMERCIAL AND REI LTD. APPROVE MERGER,
CREATING FIRST FULLY INTEGRATED GLOBAL REAL ESTATE SERVICES FIRM
LOS ANGELES, CA - DECEMBER 9, 1997 - The Boards of Directors of CB
Commercial Real Estate Services Group, Inc. (NYSE: CBG) and REI Ltd., the
holding company for all Richard Ellis operations outside of the U.K., today
announced an agreement as to the terms of a merger. Terms were not disclosed.
REI Ltd. stated that its Board of Directors is recommending the offer to its
shareholders. The senior-manager shareholders of REI have agreed to enter into
irrevocable undertakings to accept the offer.
The merger will create the first fully integrated global commercial real
estate services firm, with nearly 8,000 employees in more than 200 principal
offices in 31 countries. REI Ltd. is expected to increase CB Commercial's
annual revenues by approximately $110 million and earnings before interest,
taxes, depreciation and amortization by approximately $10 million. The combined
company will operate under a yet-to-be finalized name that will reflect the
combination of the two current names: CB Commercial and Richard Ellis.
The merger is subject to due diligence and the approval of the shareholders
of REI. The transaction is expected to be completed by the end of April 1998.
Outside of the United Kingdom, Richard Ellis firms employ approximately
1,500 people in 28 countries throughout the world. In the United Kingdom,
Richard Ellis Group Ltd. has offices in London and five other cities.
James J. Didion, Chairman and Chief Executive Officer of CB Commercial,
will serve in those same roles in the combined company. Barry White, currently
Chief Executive of REI Ltd., will become Vice Chairman - International
Activities, as well as Co-Chairman of the combined company's Global Operations
Management Board. Messrs. Didion and White said that other senior management
positions will be determined by integrating the best people from both companies.
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Mr. White said that in light of the long-standing relationship between
Richard Ellis Group Ltd. (the U.K. company) and REI Ltd., he and Mr. Didion
believed that it would be a shame to end that relationship and compete. He
expressed hope that the U.K. company might join the newly-combined CB Commercial
and REI Ltd. entity in the creation of a global enterprise.
"Our merger with REI Ltd. really creates an opportunity for the U.K.
company," Mr. Didion said, "and it would make sense from a number of
perspectives -- theirs and ours -- for them to be part of this venture."
Mr. Didion said that if the Richard Ellis Group Ltd. decided not to join
with CB Commercial and REI, the newly-combined entity was prepared to access the
U.K. market through an alternative approach.
Explaining the logic behind the CB Commercial -- REI Ltd. merger, Mr.
Didion said the combined company's intent is to create "a commonly owned,
commonly managed global real estate operation with seamless service capabilities
across all business lines and geographic locations. This fully integrated
company will meet multinational client demand, and give our professionals the
best possible platform to deliver solutions any place in the world."
"The potential for new business in this arena is considerable.
Multinational corporations are outsourcing an ever-larger share of their non-
core-business activities -- including real estate operations and the strategic
planning, facilities management and transaction management -- all of which we'll
be well prepared for, both in functional capabilities and geographic coverage."
Mr. Didion continued, "Another driver behind the merger -- besides the fact
that REI Ltd. is a high quality firm with broad geographic coverage and a rich
history of quality client service -- is the capital markets. Institutional
investment generally, and real estate investment specifically, is increasingly
viewed in a global context. In fact, capital moves cross-border so easily now
that we know the global economy is real. Our combined company will be able to
service cross-border real estate investors with on-the-ground expertise and a
network capability that will put us at the cutting edge of the real estate
industry."
Mr. White said that REI Ltd. reviewed a number of opportunities before
deciding to join with CB Commercial.
"There are five key factors which attracted us to CB Commercial," Mr. White
said. "They have superb geographical coverage in the United States. Secondly,
they are one of the market leaders in every real estate service in which we are
interested. Thirdly, they are America's leading real estate brokerage firm by
number of transactions and have a very good reputation. Then, on the corporate
real estate side, they offer a full range of strategic and transaction services
secured in a large number of strategic alliances, and backed up by the exciting
possibilities of the facilities management services capabilities resulting from
their merger with Koll. Lastly, CB Commercial are significant players in
capital management and investment advisory services, buying and selling billions
of dollars of investment property on behalf of clients. The potential synergy
between our two companies is superb."
Mr. White continued, "CB Commercial's market coverage in North America
affords REI the ability to offer European and Asian corporations more thorough
coverage of their real estate assets and requirements in the Americas.
Conversely, REI's market coverage in Asia, Europe, Africa, and South America
offers CB Commercial's clients an exactly parallel service."
"Combined and integrated, the two companies should be unbeatable," Mr.
Didion concluded.
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Founded in 1906, CB Commercial is America's leading and largest vertically
integrated commercial real estate services company. With 6,400 employees , the
company serves real estate users, owners and investors on a global basis.
Services include commercial property sales and leasing, property management,
corporate advisory services and facilities management, mortgage banking, realty
advisory and investment management, capital markets, appraisal services,
financial analysis, market research and human resources. For the 12-month
period ending September 30, 1997, CB Commercial had revenues of $662 million.
(This includes only one month of revenues from Koll Real Estate Services, which
CB Commercial acquired in late August 1997.)
This release may contain forward-looking statements as well as historical
information. Forward-looking statements, which are included in accordance with
the "safe harbor" provisions of the Private Securities Litigation Reform Act of
1995, may 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 the
forward-looking statements in this release. Such forward-looking statements
speak only as of the date of this release. The company expressly disclaims any
obligation to update or revise any forward-looking statements found herein to
reflect any changes in company expectations or results or any change in events.
The contents of this release, for which the directors of CB Commercial Real
Estate Services Group, Inc. and REI Ltd. accept responsibility, have been
approved for the purposes of Section 57 of the U.K. Financial Services Act 1986
by Coopers & Lybrand, a firm authorized by the Institute of Chartered
Accountants in England and Wales to carry on investment business.
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