Summary
This Form 8-K filing from Equity Residential (EQR), dated January 11, 2012, provides an update on the "Archstone Transaction." ERP Operating Limited Partnership (ERP), a subsidiary of EQR, had previously agreed to purchase 50% of interests in various Archstone Entities for $1.325 billion. However, this transaction was subject to a right of first offer (ROFO) by Lehman Brothers Holdings Inc. ("Lehman"). The company also announced that on January 6, 2012, a bankruptcy court denied Lehman's motion for injunctive relief to block the transaction. This ruling means the Lehman litigation is unlikely to halt the planned acquisition. However, on January 11, 2012, the bankruptcy court approved Lehman's exercise of its ROFO right for these interests. Lehman has until January 23, 2012, to provide a binding notice and until January 25, 2012, to close on its acquisition. If Lehman does not proceed, EQR's original purchase agreement remains in effect.
Key Highlights
- 1Equity Residential subsidiary ERP Operating Limited Partnership (ERP) is involved in a transaction to acquire interests in Archstone Entities.
- 2The initial agreement was to purchase 50% of certain interests for $1.325 billion, subject to a right of first offer (ROFO) by Lehman Brothers.
- 3A bankruptcy court denied Lehman's request for an injunction on January 6, 2012, clearing a legal hurdle for the transaction.
- 4On January 11, 2012, the bankruptcy court approved Lehman's exercise of its ROFO right.
- 5Lehman has a deadline of January 23, 2012, to confirm its purchase and January 25, 2012, to close.
- 6If Lehman does not complete its acquisition, Equity Residential's original purchase agreement for the 50% interest will remain active.
- 7The filing also notes that if Lehman acquires the interests, ERP may have the right to acquire other interests in Archstone Entities.