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HARTFORD-In a recent Securities and Exchange Commission filing, Arbor Realty Trust Inc. has requested a meeting with locally based CBRE Realty Finance Inc. to discuss the proposed business combination of the two companies. As of Nov. 28, CBRE Realty has 30.8 million outstanding shares, bringing Arbor's $8-per-share bid total to $246.6 million.

The letter, sent from Ivan Kaufman, CEO of Arbor Realty, to Kenneth Witkin, CEO of CBRE Realty Finance, states that "as previously discussed, we [Arbor Realty] believe our proposal represents a unique and compelling opportunity to advance the best interests of the shareholders, employees and customers of both Arbor and CBRE."

In the letter, Kaufman reveals that the company believes that the proposed business combination is the "optimal way for CBRE's shareholders to realize substantial value from their investment." The letter revealed that Arbor Realty currently owns 9.4% of the outstanding shares of CBRE's common stock and "therefore…are also requesting that CBRE board of directors provide Arbor with a waiver to exceed the 9.8% ownership limit contained in CBRE's charter."

An Arbor Realty spokesperson tells GlobeSt.com that the company is not commenting beyond what they have filed publicly. The letter from Kaufman notes that "Arbor's ownership of CBRE's common stock will not cause CBRE to violate the 'five-or-fewer' test for REITs under federal income tax law because Arbor is qualified as a REIT and satisfies this test."

The offer began on Aug. 14, when Kaufman met with Ray Wirta, the executive chairman of the board of CBRE Realty, where he indicated that he may be interested in pursuing a business combination of the two companies. Following that meeting, Kaufman sent Wirta a letter, dated Aug. 23, in which Arbor Realty proposed to acquire each outstanding share of common stock for consideration of $8. The proposal was a non-binding offer which expired on Aug. 31. Prior to the expiration of Arbor's proposed offer, CBRE Realty indicated that it was not interested in pursuing the proposal and that it intended to remain an independent company.

On Nov. 13, Kaufman met with CBRE's Witkin to see if the company would discuss a proposal by Arbor Realty to acquire the outstanding shares of common stock. Witkin indicated that CBRE Realty's board of directors would not consider such a proposal. Arbor Realty intends to review its investment in CBRE Realty on a continuing basis and may engage in discussions with management, CBRE Realty's board of directors, other shareholders and other relevant parties concerning CBRE Realty's business, operations, governance, management, strategy and future plans.

A previous filing noted that "depending on various factors including, without limitation,the Issuer's [CBRE Realty's] financial position, future actions taken by the Issuer's board of directors, price levels of the common stock, other available investment opportunities, conditions in the securities market and general economic and industry conditions, Arbor Realty may in the future take such actions with respect to its investment in the Issuer as it deems appropriate including, without limitation, making another offer to acquire the outstanding shares of common stock, purchasing additional shares of common stock in the open market or in privately-negotiated transactions, selling some or all of the shares of common stock currently beneficially owned it and/or otherwise changing its intention with respect to any and all matters referred to the filing."

Instant Insights /

Arbor Seeks CBRE Realty Meeting on $247M Bid

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