8-KLeadership ChangesAcquisitions & DispositionsRegulation FD+2

ESSEX PROPERTY TRUST, INC. 8-K Report, Acquisition Completed (Apr 1, 2014)

Filed April 1, 2014For Securities:ESS

Summary

Essex Property Trust, Inc. (ESS) has successfully completed its merger with BRE Properties, Inc. (BRE) as of April 1, 2014. This significant transaction involved each BRE common stock share being converted into a combination of Essex common stock and a cash payment. The merger was preceded by the sale of certain BRE assets into joint ventures, which resulted in a special dividend payment to BRE stockholders, thereby adjusting the cash component of the merger consideration. Investors should note the substantial issuance of new Essex shares and the immediate strategic implications of the merged entity's increased scale and operational footprint. The company also announced changes to its board of directors, with the integration of three former BRE directors onto the Essex Board. This move aligns with the merger agreement and aims to ensure a smooth transition and leverage existing expertise. The filing also confirms the closing of an asset sale prior to the merger, contributing properties to joint ventures where Essex will hold a significant ownership stake and management control. Investors should monitor upcoming filings for detailed financial statements and pro forma information related to this acquisition.

Key Highlights

  • 1Completion of the merger between Essex Property Trust (ESS) and BRE Properties, Inc. (BRE) effective April 1, 2014.
  • 2Each BRE share was exchanged for 0.2971 shares of Essex common stock and $7.18 in cash, adjusted from an initial $12.33 cash consideration due to a special dividend.
  • 3A special dividend of $5.15 per share was paid to BRE stockholders of record as of March 31, 2014, resulting from a pre-merger asset sale.
  • 4Essex issued approximately 23.1 million shares of its common stock as part of the merger consideration.
  • 5The total merger consideration per BRE share was valued at approximately $63.05, based on the opening price of Essex stock on April 1, 2014, including the stock consideration, special dividend, and cash consideration.
  • 6Three former BRE directors were appointed to the Essex Board of Directors.
  • 7An asset sale involving the contribution of certain BRE properties to three new joint ventures closed on March 31, 2014, with Essex entities holding a 50% interest and management control in these JVs.

Frequently Asked Questions

This Form 8-K filing primarily announces the completion of the merger between Essex Property Trust (ESS) and BRE Properties, Inc. (BRE). It also details the immediate effects of the merger, including the exchange of shares, board changes, and related transactions like an asset sale and special dividend.

Prior to the merger, BRE sold certain assets into joint ventures. This transaction enabled BRE to declare a special dividend of $5.15 per share to its stockholders. This special dividend reduced the cash portion of the merger consideration from an initial $12.33 per BRE share to $7.18 per BRE share.

Essex issued approximately 23.1 million shares of its common stock to complete the merger. This represents a significant increase in the number of outstanding shares, which will dilute existing shareholders' ownership percentages. However, it also expands Essex's portfolio and potential for future growth.

The filing states that historical financial statements for BRE and pro forma financial information for the combined entity will be filed in an amendment to this Current Report on Form 8-K no later than 71 calendar days after April 1, 2014. Therefore, investors can expect more detailed financial insights in the coming weeks.