Filed by Riley Property Holdings LLC
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12 of
the Securities Exchange Act of 1934
Subject Company: LNR Property Corporation
Commission File No. 001-13223
[LOGO OMITTED]
FOR IMMEDIATE RELEASE
Contact: Shelly Rubin
Chief Financial Officer
LNR Property Corporation
(305) 695-5440
LNR PROPERTY CORPORATION AGREES TO BE
ACQUIRED FOR $63.10 PER SHARE IN CASH
MIAMI BEACH, FL, AUGUST 29, 2004 - A newly formed company, which is
majority owned by affiliates of Cerberus Capital Management, L.P. and its real
estate affiliate Blackacre Institutional Capital Management, LLC, has agreed to
acquire LNR Property Corporation (NYSE:LNR), one of the nation's leading real
estate investment, finance and management companies. Under the terms of the
definitive merger agreement, the newly formed company, Riley Property Holdings
LLC, will acquire 100 percent of LNR's outstanding shares for $63.10 per share
in cash. Based on the number of common shares outstanding (including options)
and LNR's consolidated indebtedness outstanding as of its most recent fiscal
quarter-end, the transaction is valued at approximately $3.8 billion.
LNR's Board of Directors voted unanimously to recommend that LNR's
stockholders approve the transaction. That recommendation was based in part on a
unanimous recommendation of a special committee of the Board, consisting
entirely of independent directors.
Stuart A. Miller, Chairman of the LNR Board of Directors, said, "This is an
excellent opportunity for our shareholders to realize the value that has been
created in LNR since its inception in 1997. At the same time, the company will
continue as a leader in the commercial real estate property, lending and
securities markets with a new capital structure that is better suited to growing
its business as a national leader. LNR will continue to grow and expand into new
ventures with a group that has a proven track record of selecting investments
that have excellent growth potential."
Mr. Miller, and partnerships and a trust owned by his family, own shares of
LNR's stock carrying the power to cast 77.35% of the votes that can be cast with
regard to the transaction. This exceeds the majority vote that will be required
for the transaction to be approved. Miller and the partnerships and trust owned
by his family have entered into a voting agreement under which they have agreed
to vote their shares in favor of the merger as long as the LNR Board or the
special committee continue to recommend the transaction.
The merger agreement precludes LNR from soliciting other proposals, but
permits it to consider unsolicited proposals.
Miller and the partnerships and trust owned by his family have also agreed
to exchange a portion of their shares for an approximately 20.4% interest in
Riley Property Holdings. Other members of LNR's management have agreed to
acquire an additional approximately 4.6% interest in Riley Property Holdings.
The purchase price per unit to be paid by Miller, the partnerships and trust
owned by his family and management for their interests in Riley Property
Holdings will be the same as the price to be paid by Cerberus.
Jeffrey Krasnoff, CEO of LNR, who will be CEO of Riley Property Holdings,
commented, "We are very enthusiastic about this combination and the prospects it
holds for our further growth. The associates of LNR will continue to thrive and
lead the commercial real estate property, lending and securities markets across
the country and abroad under our new structure. Our proven due diligence machine
and hands-on management processes will continue to enable us to add value to the
many investment opportunities that our new capital structure will facilitate."
In addition to being subject to approval by the holders of a majority of
LNR's shares, the consummation of the transaction is subject to regulatory
approvals, entry into employment agreements with key members of LNR's
management, consents or waivers under agreements, completion of the Miller and
family partnership and trust equity exchanges and management purchases
referenced above, and other customary closing conditions. The merger is expected
to be completed by the end of 2004 or early in 2005.
Greenhill & Co., LLC served as the financial advisor to LNR. Goldman, Sachs
& Co. acted as financial advisor to Cerberus. Affiliates of Deutsche Bank AG and
Goldman, Sachs & Co. issued debt financing commitment letters to Cerberus in
connection with the merger, which are subject to satisfaction of various terms
and conditions.
LNR is a market leader in real estate finance, management, and development,
with proven expertise in adding value to commercial real estate assets,
including real estate properties, loans collateralized by real estate properties
and securities backed by loans on real estate properties.
Cerberus Capital Management, L.P. is a New York-based global private
investment firm which, together with its affiliates, manages in excess of $14
billion of unlevered capital.
LNR plans to file with the Securities and Exchange Commission (SEC) and
mail to its stockholders a proxy statement in connection with the merger. LNR
STOCKHOLDERS SHOULD CAREFULLY REVIEW THE PROXY STATEMENT AND ANY OTHER RELEVANT
DOCUMENTS FILED WITH THE SEC WITH RESPECT TO THE PROPOSED MERGER WHEN THEY
BECOME AVAILABLE BEFORE MAKING ANY DECISION CONCERNING THE PROPOSED OFFER. The
proxy statement and other relevant documents filed with the SEC will contain
important information about LNR, Riley Property Holdings, the transaction and
related matters. Once filed, investors will be able to obtain these documents
free of charge at the SEC's website (www.sec.gov). In addition, documents filed
with the SEC by LNR with respect to the proposed transaction may be obtained
free of charge by contacting LNR Property Corporation, 1601 Washington Avenue,
Suite 800, Miami Beach, Florida 33139, Attention: Investor Relations.
LNR, Riley Property Holdings and their respective directors or managers, as
applicable, and executive officers may be deemed to be participants in the
solicitation of proxies from LNR stockholders in connection with the proposed
merger. Information regarding LNR's directors and executive officers is
contained in LNR's proxy statement dated March 19, 2004 filed with the SEC.
Collectively, as of February 27, 2004, the directors and executive officers of
LNR, including Stuart Miller, beneficially owned 2,753,613 shares of LNR common
stock and 9,737,830 shares of LNR Class B common stock. LNR stockholders may
obtain additional information regarding the interests of such participants by
reading the proxy statement when it becomes available.
Caution Concerning Forward-Looking Statements
This press release includes certain "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995, including
statements relating to the consummation and timing of the merger and expected
future revenues, liquidity, products and growth opportunities of LNR. These
statements are based on management's current expectations and are subject to
uncertainty and changes in circumstances. Actual results may differ materially
from these expectations due to changes in global economic, business, competitive
market and regulatory factors, financial markets, the failure of the proposed
transaction described above to be completed for any reason or the parties being
unable to recognize the benefits of the transaction. More detailed information
about those factors is contained in LNR's filings with the SEC, including its
Annual Report on Form 10-K for the fiscal year ended November 30, 2003. Neither
LNR nor Riley Property Holdings undertakes any obligation to publicly update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.
LNR investor relations contact:
Shelly Rubin
Chief Financial Officer
LNR Property Corporation
1601 Washington Avenue
Suite 800
Miami Beach, FL 33139
investorrelations@lnrproperty.com
305 695-5440-phone
305 695-5449-fax
Cerberus investor relations contact:
Richard C. Auletta
President
R. C. Auletta and Co.
59 East 54 Street
New York, NY 10022
rca@auletta.com
212 355-0400-phone
212 355-0835-fax