Under the terms of the joint venture agreement, a company to be jointly owned by Brookfield Properties and Blackstone will acquire 100% of the outstanding common shares of Trizec Properties at $29.01 per share. Brookfield Properties will acquire 100% of the outstanding shares of Trizec Canada at $30.97 per share. The additional $1.96 per share consideration for Trizec Canada reflects the value of Trizec Canada's net assets beyond its approximately 38% interest in Trizec Properties.

The Trizec portfolio consists of 61 office properties totaling 36 million sf in nine US markets. In a move that will fit strategically in its geographic niche, Brookfield Properties will manage and operate 18.5 million sf in New York, Washington, DC, Downtown Los Angeles and Houston. Blackstone in turn will manage and operate 5.4 million sf in West Los Angeles, San Diego and some of the New York City properties. Prior to the closing of the acquisition, which is expected in the fourth quarter of 2006, Blackstone will acquire 12.1 million sf in Atlanta, Dallas, West Los Angeles, San Diego, Chicago, Charlotte and Minneapolis.

Tim Callahan, Trizec Properties' president and chief executive officer, says in a statement that the transaction "accomplishes Trizec's ultimate objective as a public company, which is to maximize stockholder value." Pleased with the "significant accomplishments" the company has made over the years, Callahan says that his only regret is "once this transaction closes, I will not have the opportunity to be part of the organization as it continues to evolve."

The joint venture is being funded through property and corporate debt, contributions of equity of $1.3 billion by Brookfield Properties and institutional partners selected by the company. The balance of the equity is being financed by Blackstone. Brookfield Properties' expected equity commitment, after syndication to institutional partners, is expected to be approximately $450 million via the company's corporate resources.

Bear, Stearns & Co. Inc., Merrill Lynch, Goodwin Procter LLP, Goodman and Carr LLP, Simpson Thacher and Bartlett LLP, and Blake Cassels & Graydon LLP served as advisers to the joint venture parties. Acquisition financing is being provided by Merrill Lynch. Morgan Stanley and JPMorgan acted as financial advisers to Trizec Properties. JPMorgan also provided a fairness opinion for Trizec Properties. Hogan & Hartson LLP acted as legal adviser to Trizec Properties, RBC Capital Markets acted as financial adviser to and provided opinion for Trizec Canada and Davies Ward Phillips & Vineberg LLP acted as legal counsel.

Instant Insights /

Trizec Properties Cashes Out for Nearly $9B

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