Joint venture pays $1.3b to buy multifamily REIT

Real Estate Weekly, Jan 4, 2006

The Town and Country Trust, a multifamily real estate investment trust, has entered into a definitive agreement to be acquired by a joint venture investment vehicle formed by affiliates of Morgan Stanley Real Estate and Onex Real Estate in an all-cash transaction totaling approximately $1.3 billion, including the assumption of debt.

Under the terms of the agreement, holders of TCT's common shares of beneficial interest will receive $33.90 per share.

Holders of limited partnership units in TCT's operating partnership will be entitled to receive $33.90 per unit.

The per share purchase price represents a 13.8% premium over TCT's closing price this afternoon and a 16.5% premium over the 60-day average closing price. TCT will continue to pay regular quarterly dividends at a rate of $0.43 per share and per unit through the closing of the transaction, plus a pro-rated dividend for the quarter in which the transaction closes.

Completion of the transaction, which is expected to occur during the first quarter of 2006, is subject to the approval by two-thirds of TCT's common shareholders and certain other customary closing conditions.

The transaction has been unanimously approved by TCT's Board of Trustees. Certain entities controlled by the Lerner family, together with executive officers and directors of TCT, who collectively own approximately 9% of the outstanding shares of TCT and 96% of the outstanding limited partnership units in TCT's operating partnership have entered into a voting agreement in favor of the transaction.

Lazard Freres & Co. LLC acted as financial advisor to TCT, and Skadden, Arps, Slate, Meagher & Flom LLP, Venable LLP and Squire, Sanders & Dempsey LLP provided legal advice. Morgan Stanley acted as financial advisor to Morgan Stanley Real Estate and Onex Real Estate and Wachtell, Lipton, Rosen & Katz and Jones Day provided legal advice.