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DENVER-Archstone-Smith Trust shareholders will vote next month on the $22-billion-plus merger agreement the company signed in May. If approved, the company will be taken private later this year by affiliates of Tishman Speyer Real Estate Venture VII LP and Lehman Brothers Holdings Inc.

The agreement calls for the buyers to pay $60.75 for each outstanding common share, which totals just under 223 million, assume approximately $6.3 billion in existing debt, and pay off Series I preferred shareholders and unitholders of the operating partnership. Archstone-Smith said Tuesday morning that the shareholder vote on the merger will take place at noon on Tuesday, Aug. 21, at the Hyatt Regency Denver Tech Center. Only shareholders of record as of July 12, 2007 will be eligible to vote.

When the deal was announced in May, the offer represented a 22.7% premium over Archstone-Smith's share price. At noontime Tuesday, shares of the company were trading at $59.63, about 1.9% below the merger price.

Archstone-Smith, an S&P 500 company, owned all or part of 86,014 units in 344 properties as of the end of March and had 3,500 employees. The company's portfolio is concentrated in Washington, DC metropolitan area, Southern California, the San Francisco Bay Area, the New York metropolitan area, Seattle and Boston. Tishman Speyer's multifamily portfolio totals approximately 11,500 units, located primarily in New York City. Almost all of it was acquired in October, when with Blackrock Inc. it paid $5.4 billion for the Stuyvesant Town and Peter Cooper Village properties from MetLife, Inc, as GlobeSt.com previously reported.

In addition to the common shares, unitholders of Archstone-Smith Operating Trust, the operating entity through which Archstone-Smith conducts substantially all of its business and which owns substantially all of its assets, will be offered the opportunity to elect to receive $60.75 per unit in cash or a newly issued preferred unit in Archstone-Smith Operating Trust. With regard to Archstone-Smith's Series I preferred shares, at the election of the buyer it is currently expected they either will be redeemed at the liquidation preference of $100,000 per share plus accrued but unpaid dividends through the closing date of the merger or be converted into preferred shares of the surviving entity in the merger.

Bank of America is providing some or all of the debt financing associated with the transaction. Archstone-Smith's financial and legal advisors were Morgan Stanley and Hogan & Hartson LLP, respectively. Tishman Speyer's legal counsel included Wachtell, Lipton, Rosen & Katz, DLA Piper LLP, Schulte Roth and Zabel LLP and Veneble LLP. Weil Gotshal & Manges LLP and Cadwalader, Wickersham & Taft LLP provided legal advice to Lehman Brothers Inc. Kirkland & Ellis LLP provided legal advice to Bank of America.

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Archstone Shareholders Set Vote for Merger

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