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): September 26, 2000
SECURITY CAPITAL GROUP INCORPORATED
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(Exact Name of Registrant as Specified in its Charter)
Maryland
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(State or Other Jurisdiction of Incorporation)
1-13355 36-3692698
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(Commission File Number) (I.R.S. Employer Identification No.)
125 Lincoln Avenue, Santa Fe, New Mexico 87501
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(Address of Principal Executive Offices) (Zip Code)
(505) 982-9292
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(Registrant's Telephone Number, Including Area Code)
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Item 5. Other
On September 26, 2000, Security Capital Group Incorporated ("Security
Capital Group"), SC Realty Incorporated, an indirect wholly owned subsidiary of
Security Capital Group ("SC-Realty"), and Security Capital U.S. Realty, an
entity formed under the laws of Luxembourg as a Societe d' Investissement a
Capital Fixe ("U.S. Realty"), entered into a definitive Transaction Agreement
(the "Transaction Agreement"), providing for, among other things:
- The purchase by SC-Realty of all of the assets of U.S. Realty, which
will consist primarily of the outstanding capital stock of Security
Capital Holdings S.A., a Luxembourg corporation ("Holdings"), in
exchange for shares of Class B Common Stock of Security Capital Group
("Class B Common Shares"), and cash to fund payments to dissenting
stockholders and to satisfy and discharge the Indenture under which
U.S. Realty's outstanding 2% Senior Unsecured Convertible Notes Due
2003 (the "U.S. Realty Notes") were issued, all as described below; and
- The distribution to stockholders of U.S. Realty, in respect of each
share of common stock of U.S. Realty, of 1.15 Class B Common Shares or,
as to stockholders who vote their shares against the transaction
proposal to be submitted to U.S. Realty stockholders and validly elect
to receive cash instead of Class B Common Shares, an amount of cash
equal to the product of (x) 1.15 multiplied by (y) the average of the
daily high and low per share sales prices of the Class B Common Shares
on the New York Stock Exchange during the fifteen trading days ending
on the sixth trading day before the U.S. Realty stockholder meeting
called to consider the transaction, net of any required withholding
taxes. U.S. Realty will then be liquidated.
Wholly owned indirect subsidiaries of Security Capital Group currently own
approximately 40.6% of the outstanding shares of U.S. Realty common stock. The
maximum number of Class B Common Shares that Security Capital Group would be
required to issue in the transaction (assuming all U.S. Realty stockholders
receive Class B Common Shares in the transaction) is 51,146,754 (plus the
34,961,935 shares that would be distributed in the transaction to wholly owned
indirect subsidiaries of Security Capital Group and returned to authorized but
unissued Class B Common Shares upon receipt in the distribution, or a total of
86,108,689, shares in the aggregate).
The cash portion of the purchase price to be paid by Security Capital
Group for U.S. Realty's assets will be equal to the amount of cash required to
pay the transaction consideration to U.S. Realty stockholders voting against the
transaction and electing cash plus the amount necessary to satisfy and discharge
the Indenture under which the U.S. Realty Notes were issued. Security Capital
Group's obligation to complete the transaction is conditioned on the total
amount of cash required to be paid in the transaction to U.S. Realty
stockholders voting against the transaction and electing cash not exceeding $200
million. Prior to the purchase of U.S. Realty's assets, U.S. Realty
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will assign to Holdings all of U.S. Realty's liabilities, other than in respect
of the U.S. Realty Notes and any liabilities in connection with an existing
advance agreement between U.S. Realty and Holdings.
The transaction must be approved by the affirmative vote of at least
two-thirds of the U.S. Realty shares present or represented at a meeting of
stockholders, provided that at least a majority of the outstanding shares are
present or represented. The issuance of Class B Common Shares in the transaction
must be approved by the affirmative vote of a majority of the votes cast by the
holders of Security Capital Group Class A Common Stock, Class B Common Shares
and Security Capital Series B Cumulative Convertible Redeemable Voting Preferred
Stock, voting together as a single class, provided that the total vote cast
represents at least a majority of the voting power of such Security Capital
voting stock entitled to vote on the proposal. The transaction is also
conditioned on clearance under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, review by the Commission de Surveillance du Secteur
Financier, the Luxembourg regulatory agency that has authority over U.S. Realty,
receipt by Security Capital Group of transaction financing (as to which Security
Capital has received a commitment in respect of a $625 million financing
facility), U.S. Realty stockholders having elected to receive no more than an
aggregate of $200 million cash in lieu of Class B Common Shares and other
customary conditions. Security Capital Group has agreed in the Transaction
Agreement to vote all U.S. Realty shares beneficially owned by it (approximately
40.6% of the outstanding U.S. Realty shares) in favor of approval of the
transaction.
A copy of the Transaction Agreement is attached hereto as Exhibit 10.1 and
is incorporated herein by reference, and the foregoing description of certain
terms of the Transaction Agreement is qualified in its entirety by reference to
the Transaction Agreement.
On September 26, 2000, Security Capital Group and U.S. Realty issued a
joint press release announcing the execution of the Transaction Agreement. In
the press release, Security Capital Group also announced that its Board of
Directors had increased its previously announced $100 million stock buyback
program to a total of $450 million. The authorized increase includes up to $200
million that would be available to U.S. Realty stockholders that elect to
receive cash in lieu of SCZ stock in the transaction, as described above. A copy
of the press release is attached hereto as Exhibit 99.1 and is incorporated
herein by reference, and the description herein of such press release and the
matters described therein is qualified in its entirety by reference to such
press release.
Item 7. Financial Statements and Exhibits
(a) Financial Statements
None.
(b) Pro Forma Financial Information
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None.
(c) Exhibits
Exhibit No. Document Designation
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10.1 Transaction Agreement dated as of September 26, 2000
by and among Security Capital Group Incorporated, SC
Realty Incorporated and Security Capital U.S. Realty.
99.1 Joint Press Release of Security Capital Group
Incorporated and Security Capital U.S. Realty dated
September 26, 2000.
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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.
SECURITY CAPITAL GROUP
INCORPORATED
By: /s/ Jeffrey A. Klopf
Jeffrey A. Klopf
Senior Vice President and Secretary
Dated: September 26, 2000
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Exhibit Index
10.1 Transaction Agreement dated as of September 26, 2000
by and among Security Capital Group Incorporated, SC
Realty Incorporated and Security Capital U.S. Realty.
99.1 Joint Press Release of Security Capital Group
Incorporated and Security Capital U.S. Realty dated
September 26, 2000.
