SECURITY CAPITAL ANNOUNCES SALE OF SHARES OF ARCHSTONE COMMUNITIES
CHICAGO, July 19 -- Security Capital Group Incorporated (NYSE: SCZ) today
announced that it has reached an agreement with Archstone Communities Trust
(NYSE: ASN) to exchange approximately 17.5 million shares of Archstone common
stock for $178.7 million in cash and $221.3 million face amount of Homestead
Village mortgage notes currently held by Archstone. Homestead is a subsidiary of
Security Capital.
Cash proceeds from the sale will be used to reduce the balance on Security
Capital's line of credit, as well as to buy back Security Capital stock under
the company's third $100 million share repurchase program.
C. Ronald Blankenship, Vice Chairman and Chief Operating Officer of Security
Capital, said, "The transaction supports Security Capital's objective of
simplifying its structure and focusing on eliminating the significant discount
to net asset value that exists in Security Capital's share price today. It also
allows us to pursue possible asset optimization transactions at Homestead that
we believe will maximize the value of our Homestead investment." In addition, he
noted that this privately negotiated transaction is an effective, non-disruptive
means for Security Capital to substantially reduce its position in Archstone
while preserving value for shareholders of both companies.
The transaction, which has been unanimously approved by the Boards of both
companies, is expected to close during the week of July 24, 2000, subject to
lender consents under Security Capital's line of credit. After completion of the
transaction, Security Capital will own approximately 29.1% of Archstone's
outstanding common shares, retaining significant representation on Archstone's
Board.
Security Capital Group Incorporated is an international real estate research,
investment and operating management company. Security Capital operates its
business through two divisions. The Capital Division provides operational and
capital deployment oversight to direct and indirect investments in real estate
operating companies, generating earnings principally from its ownership of these
affiliates. Currently, the Capital Division has investments in 16 real estate
operating companies. The Financial Services Division generates fees principally
from capital management and capital markets activities. The principal offices of
Security Capital and its directly owned affiliates are in Amsterdam, Atlanta,
Brussels,
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Chicago, Denver, El Paso, Houston, London, Luxembourg, New York and
Santa Fe.
In addition to historical information, this press release contains
forward-looking statements under the federal securities law. These statements
are based on current expectations, estimates and projections about the industry
and markets in which Security Capital operates, management's beliefs and
assumptions made by management. Forward-looking statements are not guarantees of
future performance and involve certain risks and uncertainties that are
difficult to predict. Actual operating results may differ materially from what
is expressed or forecasted in this press release. See "Risk Factors" in Security
Capital's Annual Report on Form 10-K for factors that could affect Security
Capital's future financial performance.
SOURCE: Security Capital Group Incorporated
CONTACT: William R. (Todd) Fowler of Security Capital Group Incorporated,
800-988-4304
