Summary
Essex Property Trust, Inc. (ESS) reported an exchange of preferred units for common stock and cash on November 21, 2008. Holders of 2,000,000 outstanding 7.875% Series D Cumulative Redeemable Preferred Units of Essex Portfolio, L.P. exchanged these units for 363,000 shares of ESS common stock and $10 million, plus any accrued unpaid dividends. This transaction was completed pursuant to a pre-existing agreement.
Key Highlights
- 1Exchange of 2,000,000 preferred units for common stock and cash.
- 2Issuance of 363,000 shares of Essex Property Trust, Inc. common stock.
- 3Cash payment of $10 million to preferred unit holders.
- 4Transaction settled accrued unpaid dividends on the preferred units.
- 5The equity issuance was not registered under the Securities Act of 1933.
- 6The sale relied on Section 4(2) exemption (private placement) and Rule 506 of Regulation D.
- 7Investors represented themselves as 'accredited investors' and the transaction involved no general solicitation.
Frequently Asked Questions
The primary purpose was to disclose the unregistered sale of ESS common stock and the exchange of preferred units for common stock and cash that occurred on November 21, 2008.
No, the 363,000 shares of common stock were not registered under the Securities Act of 1933. The company relied on exemptions for private placements, specifically Section 4(2) and Rule 506 of Regulation D.
The recipients were the holders of the 2,000,000 authorized and outstanding 7.875% Series D Cumulative Redeemable Preferred Units of Essex Portfolio, L.P., who exchanged their units in this transaction.
It signifies that the offering was not made to the general public. The company determined it met specific criteria for exemption from registration, typically involving sophisticated investors ('accredited investors' in this case) and a negotiated transaction rather than a broad solicitation.