SANTA ANA, CA– Grubb & Ellis Company (NYSE: GBE), a leading real estate services and investment firm, has entered into definitive agreements with qualified institutional buyers and accredited investors to effect the sale of 900,000 shares of a new issuance of a 12 percent cumulative participating perpetual convertible preferred stock for $90 million in gross proceeds.The company has also granted the initial purchaser and placement agent a 45-day option to purchase up to an additional 100,000 shares of preferred stock.
The closing of the transaction is expected to occur on or about Nov. 6, 2009, and the company intends to use the offering proceeds to repay in full its credit facility at the agreed reduced principal amount equal to approximately 65 percent of the principal amount outstanding under such facility.
The balance of the offering proceeds will be used for general working capital purposes and transaction costs. As part of the preferred stock offering, the $5 million subordinated loan provided on Oct. 2, 2009 to the company by an affiliate of its largest stockholder will be converted into the preferred stock at the offering price and accrued interest will be paid with respect to the subordinated loan.
“This is a transformational event for Grubb & Ellis. Upon closing, Grubb & Ellis will be one of the stronger capitalized companies in the real estate services industry,” said C. Michael Kojaian, (top right photo) the company’s chairman and largest stockholder. “We are extremely pleased with the demand for the security and the quality of the institutional investors attracted to the company.”
Additional terms and information with respect to the transaction will be included in a Current Report on Form 8-K and a preliminary proxy statement to be filed with the Securities and Exchange Commission by the company and a final proxy statement to be filed with the SEC and mailed to stockholders.
Contact: Janice McDill, Phone: 312.698.6707, Email: janice.mcdill@grubb-ellis.com
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