"The company intends to vigorously prosecute this declaratory judgment lawsuit," Prime Group Realty Trust says in a statement. "The company is continuing its ongoing process of exploring the possible sale of the company." The REIT, which has been for sale in whole or in part for more than two years, reportedly has other potential bidders in line.
Former chairman Michael W. Reschke and E. Barry Mansur made a bid to buy Prime Group Realty Trust common stock at $6.70 per share in late October. The REIT claims the joint venture was unable to get acceptable financing by a November deadline, which Prime/Mansur Investment Partners disputes. Instead, Mansur claims the REIT is attempting to renegotiate the deal structure.
"Prime has wrongfully attempted to terminate our jointly executed merger agreement, which continues to be in effect," says Mansur, controlling shareholder in the joint venture. The joint venture is negotiating with the REIT in an attempt to push the sale through, Mansur adds.
A group led by American Mortgage Acceptance Co. put together a $122-million loan to Prime/Mansur Investment Partners so it could proceed with the purchase shortly before the joint venture's deadline to have acceptable financing in place. Mansur and Reschke paid American Mortgage Acceptance $435,000 for the financing commitment, according to a filing with the Securities and Exchange Commission.
After falling to $5.75 per share on the news the deal had fallen apart, Prime Group Realty Trust common stock has risen to $6.29 per share. The company is almost exclusively a city and suburban office REIT, having sold off 3.44 million sf of industrial space to CenterPoint Properties Trust this year.
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