Pennsylvania Real Estate Investment Trust to buy Crown American Realty Trust

Weekly Corporate Growth Report, May 19, 2003

The Deal: Pennslyvania Real Estate Investment Trust has signed a definitive agreement to acquire Crown American Realty Trust in a $231.6 million stock transaction. Pennsylvania REIT will issue 0.3589 common shares for each share of Crown American. The deal includes a $20 million termination fee payable to either company if the deal is terminated under certain circumstances. Pennsylvania REIT also plans to assume Crown American's mortgage debt of about $619.1 million. The deal has been approved by the boards of both companies and is expected to close in the fourth quarter of 2003. The transaction remains subject to shareholder approval and other customary closing conditions.

Discussion: Crown American is a real estate investment trust that owns, manages, leases, and develops enclosed shopping malls. The company portfolio includes more than 25 malls, about 60 percent of which are in Pennsylvania. The company also owns miscellaneous acreage and an office building.

Pennsylvania REIT buys, develops, and manages apartment properties and shopping centers. The company portfolio includes more than 20 shopping centers, and some 7,200 apartments in about 20 complexes. The company also owns a small number of industrial properties.

After completion of the merger, Pennsylvania REIT intends to increase its quarterly cash dividend from 51 cents to 54 cents.