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[FIRST WASHINGTON REALTY TRUST, INC. PRESS RELEASE]
FOR IMMEDIATE RELEASE:
FIRST WASHINGTON REALTY TRUST, INC.
TO BE ACQUIRED BY AN AFFILIATE OF
CALPERS
TRANSACTION VALUED AT APPROXIMATELY $800 MILLION
BETHESDA, MD, September 28, 2000 -- First Washington Realty Trust, Inc.
(NYSE: FRW; FRW Pr) today announced that it has entered into a definitive
agreement to sell the Company to U.S. Retail Partners, LLC, a joint venture of
the California Public Employees' Retirement System ("CalPERS") and National
Retail Partners, LLC, for a total consideration of approximately $800 million to
be paid in cash together with the assumption of certain indebtedness. Management
estimates net proceeds from the transaction, after the payment of debt and other
liabilities and the payment of transaction expenses, will yield approximately
$26 per share of common stock in cash (and approximately $33.33 per share of
preferred stock in cash). The estimated share price represents a premium of
25.3% over First Washington's closing common stock price of $20.75 on September
27, 2000.
The sale and plan of liquidation were unanimously adopted by a special
committee of independent directors as well as by the full Board of Directors of
First Washington at a special meeting held on September 25, 2000. Completion of
the transaction, which is expected to occur in January 2001, is subject to
approval by the First Washington stockholders and the limited partners of the
Company's operating partnership and the satisfaction of customary closing
conditions. A number of factors will affect the actual amount distributed to
stockholders and limited partners, including transaction expenses, the Company's
operations prior to closing and certain closing adjustments.
Under the terms of the transaction, First Washington has adopted a plan of
liquidation which will be accomplished by the sale of substantially all of the
Company's assets followed by a merger of the Company and its affiliated
operating partnership into two CalPERS-related entities. In connection with the
transaction, existing stockholders will receive all cash for their stock, and
existing operating partnership unit holders (who participate in the Company's
"UPREIT" operating partnership) will have the option of receiving their
liquidation payment in either cash or a combination of cash and a partnership
interest in the newly-merged operating partnership entity.
In a separate undertaking, First Washington's two senior officers, Stuart
D. Halpert and William J. Wolfe, have agreed to form a new private entity which
will provide management, leasing and related services to U.S. Retail Partners,
LLC in connection with the properties to be acquired.
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"This portfolio is in the middle of the strike zone for CalPERS' core real
estate strategic plan," said Michael Flaherman, Chair of CalPERS Investment
Committee. "It strengthens our exposure on the East Coast and features
high-quality grocery-anchored centers located in strong markets that will
provide the opportunity to enhance cash flow and value to our Fund."
Stuart D. Halpert, who is the Chairman of First Washington, and William J.
Wolfe, who is the President, issued the following joint statement: "On a wholly
personal level, to participate in the sale of a company that we have steadfastly
built with our colleagues over the last eighteen years is emotionally difficult.
However, when we decided in 1994 to make an initial offering of First Washington
stock to the public, we did so knowing we were taking on a whole new set of
priorities. And this transaction fulfills what we regard as the most important
of all of those priorities -- to deliver highly attractive shareholder value."
"This transaction permits First Washington to realize today, in the 'short
run', what we had heretofore regarded as a longer term objective, and that is a
materially higher stock price. For an extended period of time, First
Washington's stock has traded substantially below what we believe to be its net
asset value. In this transaction, assuming a liquidation price of approximately
$26 per common share, our common stockholders will realize a 28.6% premium to
their stock's trailing 52-week average closing price."
"Finally, as real estate professionals we personally look with pleasure to
a new and continuing relationship with U.S. Retail Partners, LLC. Our
association will create for us exciting challenges and it will continue to
provide our colleagues of many years with rewarding career opportunities.
All-in-all, we believe this is a remarkably good transaction."
Chase Securities Inc. is acting as exclusive financial advisor to First
Washington and has issued a fairness opinion to the Company in connection
with the proposed transaction.
First Washington Realty Trust, Inc. is a publicly-traded real estate
investment trust that owns and operates 63 neighborhood shopping centers
throughout the Mid-Atlantic States and the greater Chicago and Milwaukee
metropolitan areas.
California Public Employees' Retirement System, with assets of over $177
billion, is the largest public pension fund in the United States. The pension
fund provides retirement and health benefits to more than 1.2 million members,
including active workers and retirees and their families and beneficiaries. The
pension fund is headquartered in Sacramento, California.
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The preceding information may contain forward-looking statements
concerning the Company's plans, objectives and expectations, including
statements concerning the possible outcome of the transactions, the anticipated
proceeds from the transactions and timing of the transactions. Such
forward-looking statements and comments in this press release are made pursuant
to the safe harbor provisions of Section 21E of the Securities Exchange Act of
1934. Such statements relating to, among other things, events, conditions,
prospects and financial conditions that may affect the Company's future
distributions, plans of operations, business strategy, and financial position
are not guarantees of future performance and are necessarily subject to risks
and uncertainties, some of which are significant in scope and nature, including
without limitation, increased competition, adverse economic trends, failure of
the proposed transaction to take place, factors described above and other
factors which could cause actual results to differ materially from those
described in such forward-looking statements.
First Washington Realty Trust, Inc. plans to mail a proxy statement to its
stockholders containing information about the transactions. Stockholders of
First Washington are advised to read the proxy statement carefully when it
becomes available because it will contain important information about the
transactions, the persons soliciting proxies related to the transactions, and
related matters. Stockholders of First Washington may obtain free copies of the
proxy statement (when available) and other documents filed by First Washington
with the Securities and Exchange Commission at http://www.sec.gov. Free copies
of the proxy statement (when available) may also be requested from the Company
at: First Washington Realty Trust, Inc., Attention: Investor Relations
Department, 4350 East-West Highway, Suite 400, Bethesda, Maryland 20814.
Reference is made to the discussion of Risk Factors in the Company's Form 8-K
filed on December 23, 1999.
Contacts: Stuart D. Halpert, Chairman 301-907-7800
William J. Wolfe, President 301-907-7800
James G. Blumenthal, Chief Financial Officer 301-907-7800
Website: www.firstwash.com
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