NEW YORK, NY - December 14, 2001 - The Boards of Directors of Carey Institutional Properties Incorporated. (CIP®) and Corporate Property Associates 10 Incorporated (CPA®:10), two non-publicly traded diversified net lease real estate investment trusts (REITs) managed by W. P. Carey & Co. LLC (NYSE: WPC), today announced that they have unanimously approved the merger of CPA®:10 with CIP®.
Under the terms of the merger, CIP® will be the surviving company and will retain the same board of directors and officers. The two Boards also unanimously recommended that their respective stockholders approve the merger. Following clearance by the Securities Exchange Commission and other state security authorities, stockholders will receive proxy materials necessary to approve the proposed merger. Shareholders will be able to cast their vote by mail, telephone or the Internet.
Under the terms of the merger, CPA®:10 stockholders will have the option of receiving 0.8445 shares of CIP® common stock for each share of CPA®:10 owned, or they can opt to receive a Promissory Note that will mature on December 31, 2004 which will bear an annual interest rate of four percent (4%), payable quarterly in arrears, in principal amount equal to $11.23 per CPA®:10 share owned. Only CPA®:10 shareholders of record on December 13, 2001 are eligible to receive Promissory Notes. The merger is conditioned upon several events, including approval by holders of two-thirds of the outstanding shares of CPA®:10 and CIP® and holders of at least a majority of the CPA®:10 shareholders electing to receive CIP® shares.
As a result of the merger, the combined company:
- will have greater geographic and tenant diversification;
- will realize economies of scale and greater operating and tenant synergies;
- will have a larger total appraised real estate asset value of approximately $700 million; and
- will have a stronger balance sheet and enhanced financial flexibility.
Wm. Polk Carey, Chairman of W. P. Carey & Co. LLC, said, "Stockholders in both companies will benefit greatly from the merger of CIP® and CPA®:10. On one hand it will offer attractive options for CPA®:10 investors, while on the other hand, CIP® shareholders will gain investments in more than 23 additional properties. If approved by shareholders, this new company will continue to own single-tenant commercial properties and seek to provide investors with rising quarterly income."
Founded in 1973, W. P. Carey & Co. specializes in corporate real estate financing through the corporate net lease, or sale-leaseback structure. The firm and its affiliates continue to be the leading lessors of net leased corporate real estate in the United States. As the largest publicly traded limited liability company in the world, the company owns and/or manages more than 400 commercial and industrial properties throughout the United States and Europe comprising of more than 50 million-square-feet of space. The firm is headquartered in Manhattan and has offices in London and Paris.
This press release contains forward-looking statements within the meaning of the Federal securities laws. A number of factors could cause the company's actual results, performance or achievement to differ materially from those anticipated. Among those risks, trends and uncertainties are the general economic climate; the supply of and demand for office and industrial properties; interest rate levels; the availability of financing; and other risks associated with the acquisition and ownership of properties, including risks that the tenants will not pay rent, or that costs may be greater than anticipated. For further information on factors that could impact the company, reference is made to the company's filings with the Securities and Exchange Commission.
