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SAN FRANCISCO-In conference calls this afternoon, Equity Office Properties Trust officials said they plan to retain and add to office holdings in its top 20 markets — significantly beefed up by its just-closed, $7.3-billion merger with Spieker Properties — while shedding office holdings in other markets and completely divesting itself of the 12.2 million sf of West Coast industrial properties also acquired in the Spieker merger.

The merger, announced in February and approved by shareholders this morning, grows EOP’s holdings from 99 million sf in 380 buildings to 125 million sf in 670 buildings. EOP received 82% voter approval and Spieker received 74% voter approval, according to EOP officials. The combined entity will operate under the Equity Office name and out of Equity’s existing headquarters in Chicago.

EOP’s senior vice president of investor relations Diane Morefield said in a conference call that of the approximately 580 Spieker employees, 350 are being retained and 250 are being let go. Most of those being retained are field personnel who will lease and manage buildings, says Morefield. Most of those being let go are from Spieker’s Menlo Park headquarters, she says.

By incorporating the Spieker assets, EOP secures its position as the first or second largest office building owner in nine of its 10 top markets, which include Boston, Chicago, Seattle, San Francisco, Atlanta, Los Angeles, San Jose, Orange County; Washington, D.C. and New York. Morefield says the merger has the most impact on its Seattle, San Francisco, San Jose, Los Angeles and Orange County markets.

Regarding properties in its smallest markets — where the company owns only one or two assets — Morefield says the EOP will consider divesting itself of those properties while continuing to focus building markets where the company already has significant market share. Moorefield also says the company will likely dispose of the 12.2 million sf of industrial holdings it acquired as part of the merger. “Our intent is to really look at that portfolio over the next six-to-12 months,” says Morefield. “We’re likely to spin it off, but we have as yet made no commitment to do that.”

Developments acquired from Spieker for which ground has been broken will continue, says Morefield, while projects in the “pre-planning” stage will be reevaluated. “We have no immediate plans to develop and will review opportunities as they come up,” says Morefield.

Under the terms of the merger agreement, Spieker common shareholders will receive $13.50 in cash and 1.49586 Equity Office common shares for each outstanding share of Spieker common stock. Fractional shares will be paid in cash at the rate of $31.16 per Equity Office share. Spieker Partnership unit holders will receive 1.94462 of EOP Partnership units for each Spieker Partnership unit, rounded to the nearest whole number. Morefield says the money and shares should be paid out by the end of next week.

Equity Office will issue approximately 118.2 million new EOP common shares and Operating Partnership units, for a total number of shares and units outstanding of approximately 468.9 million. In addition, each outstanding share of Spieker series B, C and E preferred stock will be converted into one newly created Equity Office series D, E or F preferred share, respectively, with the same terms and conditions of the original issues.

In connection with the merger, EOP will assume approximately $2.1 billion of Spieker debt. In addition, Equity Office recently closed a new $1 billion unsecured bridge credit facility, which matures in June 2002. This facility will be used to fund a portion of the cash required to effect the merger transaction.

As part of this merger, the Equity Office Board of Trustees will be expanded from 13 to 16 members. The new members will be: Ned Spieker, former chairman of Spieker Properties, and former Co-Chief Executive Officers Craig Vought and John Foster.

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