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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): NOVEMBER 5, 1999
PRICE ENTERPRISES, INC.
(Exact name of Registrant as specified in its charter)
MARYLAND 0-20449 33-0628740
(State or Other (Commission File Number) (I.R.S. Employer
Jurisdiction of Incorporation) Identification No.)
4649 MORENA BLVD.
SAN DIEGO, CALIFORNIA 92117
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (858) 581-4600
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This Current Report on Form 8-K is filed by Price Enterprises, Inc., a
Maryland corporation (the "Company"), in connection with the matters described
herein.
ITEM 1. CHANGE OF CONTROL OF REGISTRANT.
On November 5, 1999, Excel Legacy Corporation ("Legacy") announced that
it had accepted the tender of shares of common stock of the Company pursuant to
Legacy's exchange offer (the "Offer") described in the Offer to
Exchange/Prospectus dated October 6, 1999 (the "Offer to Exchange"). Legacy has
accepted for payment 12,154,289 shares of the Company's common stock (the
"Tendered Shares") pursuant to the Offer, which represents approximately 91.3%
of the outstanding shares of the Company's common stock and approximately 77.5%
of the voting power of the Company. The Offer expired at 12:00 Midnight, New
York City time, on Wednesday, November 3, 1999 (the "Expiration Date"). All
shares of common stock validly tendered and not properly withdrawn prior to the
Expiration Date were accepted by Legacy.
Legacy acquired the Tendered Shares for a total of $8.50 per share,
consisting of $4.25 per share in cash, $2.75 per share in principal amount of
Legacy's 9% Convertible Redeemable Subordinated Secured Debentures due 2004 (the
"Debentures") and $1.50 per share in principal amount of Legacy's 10% Senior
Redeemable Secured Notes due 2004 (the "Notes"). The per share consideration was
determined through arm's length negotiations and fixed pursuant to an agreement,
dated May 12, 1999, as amended, among Legacy, Sol Price, as trustee of several
trusts, and several other stockholders of the Company (the "Stockholders
Agreement") and an agreement, dated June 2, 1999, as amended, by and between
Legacy and the Company (the "Company Agreement").
Legacy paid a total of approximately $52.9 million in cash and issued an
aggregate of approximately $33.3 million in principal amount of Debentures and
approximately $18.1 million in principal amount of Notes to acquire the Tendered
Shares. The Debentures were issued pursuant to an Indenture, dated as of
November 5, 1999, between Legacy and Norwest Bank Minnesota, National
Association (the "Debenture Indenture"). The Notes were issued pursuant to an
Indenture, dated as of November 5, 1999, between Legacy and Norwest National
Bank Minnesota, National Association (the "Notes Indenture"). The Notes and
Debentures are secured by a first priority security interest in 117.647 shares
of the Company's common stock for each $1,000 principal amount issued. The cash
consideration was funded from Legacy's general working capital, borrowing from
Legacy's credit facility and the proceeds of three recent transactions:
(1) On August 23, 1999, Legacy sold to Wal Mart Real Estate Business
Trust eight properties that were previously under lease to Wal Mart Stores,
Inc., for aggregate consideration of approximately $35.0 million comprised of
approximately $11.0 million in cash and the assumption of approximately $24.0
million in liabilities.
(2) On October 25, 1999, Legacy sold a property located in Highlands
Ranch, Colorado to HRAMC LLC for aggregate consideration of approximately $25.3
million comprised of approximately $7.7 million in cash and the assumption of
$17.6 million in liabilities.
(3) The Sol and Helen Price Trust (the "Trust") loaned Legacy
approximately $27.3 million pursuant to a Note Purchase Agreement, dated as of
October 6, 1999, between Legacy and the Trust (the "Note Purchase Agreement").
The loan is secured by a second priority security interest in the shares of the
Company's common stock which secure the Debentures and the Notes and a first
priority security interest in any other shares of the Company's common stock
which Legacy owns at any time.
Pursuant to the Company Agreement, the Company's board of directors has
been reduced from six to five members and Gary B. Sabin, Richard B. Muir and
Simon M. Lorne were appointed to the
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Company's board and Jack McGrory and James F. Cahill were retained as members of
the Company's board. Robert E. Price, Paul A. Peterson, Murray L. Galinson, and
Anne L. Evans resigned from the Company's board. The Company's board appointed
Gary B. Sabin as Chief Executive Officer and President of the Company and the
senior officers of Legacy as the senior officers of the Company. Jack McGrory
has also been appointed to Legacy's board of directors and named Chairman of the
Board of the Company.
Under the Company Agreement, Legacy has agreed that the holders of the
Company's preferred stock will be entitled to elect a majority of the Company's
board of directors and to have one designee on Legacy's board of directors,
until: (a) less than 2,000,000 shares of the Company's preferred stock remain
outstanding, (b) Legacy makes an offer to purchase any and all outstanding
shares of the Company's preferred stock at a cash price of $16.00 per share, and
purchases all shares duly tendered and not withdrawn, or (c) the directors of
the Company (i) issue any equity securities without unanimous approval of the
Company's board or (ii) fail to pay dividends on the Company's common stock in
an amount necessary to maintain the Company's status as a REIT, or in an amount
equal to the excess, if any, of the Company's adjusted funds from operations,
less preferred stock dividends, over $7.5 million.
The foregoing description of the Offer to Exchange, the Stockholders
Agreement, the Company Agreement, the Debentures Indenture, the Notes Indenture
and the Note Purchase Agreement is qualified in its entirety by reference to the
Offer to Exchange, the Stockholders Agreement, the Company Agreement, the
Debentures Indenture, the Notes Indenture and the Note Purchase Agreement, which
are incorporated by reference into this Form 8-K as Exhibit 10.1., Exhibit 10.2,
Exhibit 10.3, Exhibit 10.4, Exhibit 10.5 and Exhibit 10.6, respectively.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits. The following exhibits are filed as part of this report:
10.1 Offer to Exchange/Prospectus dated October 6, 1999
(incorporated by reference to Exhibit (a)(1) to
Legacy's Tender Offer Statement on Schedule 14D-1 as
filed with the Commission on October 6, 1999).
10.2 Agreement, dated May 12, 1999, as amended, between
Legacy and the other individuals and entities listed
on the signature pages thereto (incorporated by
reference to Annex A to the Offer to
Exchange/Prospectus dated October 6, 1999, filed as
Exhibit (a)(1) to Legacy's Tender Offer Statement on
Schedule 14D-1 as filed with the Commission on
October 6, 1999).
10.3 Agreement, dated June 2, 1999, as amended, between
Legacy and the Company (incorporated by reference to
Annex B to the Offer to Exchange/Prospectus dated
October 6, 1999, filed as Exhibit (a)(1) to Legacy's
Tender Offer Statement on Schedule 14D-1 as filed
with the Commission on October 6, 1999).
10.4 Indenture, dated as of November 5, 1999, between
Legacy and Norwest Bank Minnesota, National
Association, for 9.0% Convertible Redeemable
Subordinated Secured Debentures due 2004, including
form of Debenture and form of Pledge Agreement
(incorporated by reference to Exhibit 10.4 to
Legacy's Current Report on Form 8-K filed with the
Commission on November 12, 1999 (File No. 0-23503)).
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10.5 Indenture, dated as of November 5, 1999, between
Legacy and Norwest Bank Minnesota, National
Association, for 10.0% Senior Redeemable Secured
Notes due 2004, including form of Note and form of
Pledge Agreement (incorporated by reference to
Exhibit 10.5 to Legacy's Current Report on Form 8-K
filed with the Commission on November 12, 1999 (File
No. 0-23503)).
10.6 Note Purchase Agreement, dated as of October 6, 1999,
between Legacy and The Sol and Helen Price Trust,
including form of Secured Promissory Note and form of
Pledge Agreement (incorporated by reference to
Exhibit 10.6 to Legacy's Current Report on Form 8-K
filed with the Commission on November 12, 1999 (File
No. 0-23503)).
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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.
Date: November 15, 1999 PRICE ENTERPRISES, INC.
By: /s/ Richard B. Muir
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Name: Richard B. Muir
Title: Executive Vice President, Chief
Operating Officer and Secretary
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EXHIBIT INDEX
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Exhibit
Number Description
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10.1 Offer to Exchange/Prospectus dated October 6, 1999
(incorporated by reference to Exhibit (a)(1) to
Legacy's Tender Offer Statement on Schedule 14D-1 as
filed with the Commission on October 6, 1999).
10.2 Agreement, dated May 12, 1999, as amended, between
Legacy and the other individuals and entities listed
on the signature pages thereto (incorporated by
reference to Annex A to the Offer to
Exchange/Prospectus dated October 6, 1999, filed as
Exhibit (a)(1) to Legacy's Tender Offer Statement on
Schedule 14D-1 as filed with the Commission on
October 6, 1999).
10.3 Agreement, dated June 2, 1999, as amended, between
Legacy and the Company (incorporated by reference to
Annex B to the Offer to Exchange/Prospectus dated
October 6, 1999, filed as Exhibit (a)(1) to Legacy's
Tender Offer Statement on Schedule 14D-1 as filed
with the Commission on October 6, 1999).
10.4 Indenture, dated as of November 5, 1999, between
Legacy and Norwest Bank Minnesota, National
Association, for 9.0% Convertible Redeemable
Subordinated Secured Debentures due 2004, including
form of Debenture and form of Pledge Agreement
(incorporated by reference to Exhibit 10.4 to
Legacy's Current Report on Form 8-K filed with the
Commission on November 12, 1999 (File No. 0-23503)).
10.5 Indenture, dated as of November 5, 1999, between
Legacy and Norwest Bank Minnesota, National
Association, for 10.0% Senior Redeemable Secured
Notes due 2004, including form of Note and form of
Pledge Agreement (incorporated by reference to
Exhibit 10.5 to Legacy's Current Report on Form 8-K
filed with the Commission on November 12, 1999 (File
No. 0-23503)).
10.6 Note Purchase Agreement, dated as of October 6, 1999,
between Legacy and The Sol and Helen Price Trust,
including form of Secured Promissory Note and form of
Pledge Agreement (incorporated by reference to
Exhibit 10.6 to Legacy's Current Report on Form 8-K
filed with the Commission on November 12, 1999 (File
No. 0-23503)).
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