DGAP-News: Prime Office REIT-AG: Announcement of a cash

DGAP-News: Prime Office REIT-AG / Key word(s): Capital Increase Prime Office REIT-AG: Announcement of a cash capital increase in connection with the planned merger of Prime Office REIT-AG into OCM German Real Estate Holding AG (the future 'Prime Office AG') 13.01.2014 / 08:23 --------------------------------------------------------------------- Announcement of a cash capital increase in connection with the planned merger of Prime Office REIT-AG into OCM German Real Estate Holding AG (the future 'Prime Office AG') - The planned merger of Prime Office REIT-AG into OCM German Real Estate Holding AG will likely become effective on 21 January 2014 after registration with the commercial register of OCM German Real Estate Holding AG - Trading in the shares of Prime Office AG on the regulated market (Prime Standard) of the Frankfurt stock exchange is expected to start on 22 January 2014 subject to the approval of the offering prospectus by the German Financial Supervisory Authority (BaFin) - Public offering of up to 50,228,004 new no par value shares with pre-emptive rights for the shareholders of the future Prime Office AG is planned for January/February 2014 subject to the approval of the offering prospectus by the BaFin - Targeted gross proceeds of approximately EUR 130 million to ensure adequate capitalisation levels of Prime Office AG and to reduce leverage ('LTV') to about 58 % - Funds advised by Oaktree will participate with at least EUR 65 million in the cash capital increase; in addition, one other investor has announced the intention to participate in the capital increase with up to EUR 20 million - With a market value of the commercial property portfolio of about EUR 1.9 billion as at 30 September 2013, Prime Office AG will be a leading office property platform with a focus on German metropolitan regions and conurbations Munich, Cologne, 13 January 2014. As part of the planned merger of Prime Office REIT-AG into OCM German Real Estate Holding AG (the future 'Prime Office AG'), the two companies have agreed under their merger contract that they will conduct a cash capital increase with pre-emptive rights for the shareholders of Prime Office AG to sustainably improve the capital structure of post-merger Prime Office AG. The merger of Prime Office REIT-AG into OCM German Real Estate Holding AG will become effective upon registration of the merger into the commercial register of OCM German Real Estate Holding AG. After the consummation of the merger, OCM German Real Estate Holding AG will operate under the registered name of Prime Office AG (the 'Company'). Registration of the merger is planned for 21 January 2014. Upon the consummation of the merger, existing shareholders of Prime Office REIT-AG will become shareholders of the Company at that particular time based on the agreed exchange ratio of 1:1, i.e. the shareholders of Prime Office REIT-AG will receive one share of the Company for each share in Prime Office REIT-AG. The exchange of the shares takes place immediately after the consummation of the merger. The transaction agreement and the merger contract between Prime Office REIT-AG and OCM German Real Estate Holding AG stipulated that OCM German Real Estate Holding AG would increase its share capital to EUR 82 million from company funds prior to the effective date of the merger. The Company has already complied with this condition precedent. Under another merger-related clause, OCM German Real Estate Holding AG is to increase its share capital by another 51,941,345 new no par value bearer shares issued to the shareholders of Prime Office REIT-AG. Upon closing of the planned merger, the share capital of the Company will therefore amount to EUR 133,941,345, divided into 133,941,345 no par value bearer shares. The admission of the Company's shares to the regulated market (Prime Standard) of the Frankfurt stock exchange has been applied for. Trading in the shares of Prime Office AG in the regulated market (Prime Standard) of the Frankfurt stock exchange is expected to start on 22 January 2014 subject to the approval of the offering prospectus by the BaFin. Hence, the shares of the Company can be traded freely as soon as the planned merger is closed providing for sufficient free float from the beginning. 'We are delighted that the merger of the two companies is now on the finishing straight and that we can in due course implement our joint plan of creating a leading, listed office property platform with a conservative financing structure. We have always believed in the merits of this strategically momentous undertaking and are now looking forward to make our mark in and to actively shape the German commercial property sector as a strong player,' says Jürgen Overath, CEO of OCM German Real Estate Holding AG and future board member of Prime Office AG. In the light of these circumstances and subject to the approval of the offering prospectus by the BaFin, the Company plans to make a public offering in Germany of up to 50,228,004 new no par value bearer shares from the approved capital in January/ February 2014 that grants pre-emptive rights to the shareholders of Prime Office AG. The Company expects to raise gross proceeds of about EUR 130 million from the cash capital increase. Funds advised by Oaktree announced their intention to participate in the capital increase with at least EUR 65 million. Another investor has also announced the intention to support the transaction and participate with up to EUR 20 million in the capital increase. 'The planned capital increase offers investors an attractive opportunity to participate in the prospective earnings and dividends of Prime Office AG as a leading German office property platform. It will give the Company a conservative financing structure and particularly a strong capital position from the start. With it, we will lay the foundation for attractive cash flows as well as a sustainable growth strategy that should translate into dividends of about 40 to 45 percent of our funds from operations for our shareholders from fiscal year 2014,' says Alexander von Cramm, CEO of Prime Office REIT-AG and future board member of Prime Office AG. The creation of Prime Office AG will establish a leading office property platform with a focus on German metropolitan regions and conurbations. Initially, the geographically diversified commercial real estate portfolio will contain 58 properties with a total rentable space of about 970,000 square metres and an attractive and broad tenant base. According to a valuation performed by CB Richard Ellis on 30 September 2013, the properties had a total market value of approximately EUR 1.9 billion. The property sales in the fourth quarter of 2013 are already reflected in this number. The business model of Prime Office AG will focus on the return-oriented asset management particularly of office properties in German metropolitan regions and conurbations. The strategy of the Company will be complemented by the selective pursuit of value-add investments and attractive buying opportunities. Furthermore, the Company will use potential selling opportunities to create value from attractive disposal proceeds and reinvestments. The size of the Prime Office AG portfolio combined with its strong diversification creates a robust foundation for stable cash flows, a healthy and growing earnings power and a sustainable dividend. This is supported by the portfolio's profitability, the sound and conservative financing structure and the modest interest costs. Prime Office AG will be committed to taking an active part in the consolidation of the German real estate industry over the coming years. Berenberg, Kempen & Co and UBS Investment Bank have been mandated as underwriters (joint global coordinators) for the merger-related cash capital increase. Berenberg is also acting as financial advisor for the merger. The public offering (cash capital increase) and the admission of the new shares from the cash capital increase to trading in the regulated market (Prime Standard) of the Frankfurt stock exchange will be made based on a securities prospectus to be approved by BaFin and published thereafter. The offering prospectus is available free of charge on the Internet after the approval of BaFin and, during common business hours, from the issuer. Contacts Prime Office REIT-AG Richard Berg Director Investor Relations / Corporate Communications Hopfenstrasse 4 80335 Munich Telephone +49. 89. 710 40 90 40 Facsimile +49. 89. 710 40 90 99 Email richard.berg@prime-office.de DISCLAIMER This document constitutes neither an offer to sell nor a solicitation to buy or subscribe for securities. Any such offer will be made solely on the basis of the securities prospectus yet to be approved by the German Financial Supervisory Authority (BaFin) and published thereafter. The information legally required to be provided to investors will be contained only in the securities prospectus. The information contained herein is not for distribution, directly or indirectly, in or into the United States of America (including its territories and possessions of any State of the United States of America or the District of Columbia) and must not be distributed to 'U.S. persons' (as defined in Regulation S under the U.S. Securities Act of 1933, as amended ('Securities Act')) or publications with a general circulation in the United States of America. This document is not an offer of securities for sale in the United States of America. The securities have not been and will not be registered under the Securities Act and may not be offered or sold absent registration or an exemption from registration under the Securities Act. The Issuer does not intend to register any portion of the offering in the United States of America or to conduct a public offering of the securities in the United States of America. This document is not an offer of securities for sale in the United States of America, Canada, Japan or Australia. End of Corporate News --------------------------------------------------------------------- 13.01.2014 Dissemination of a Corporate News, transmitted by DGAP - a company of EQS Group AG. The issuer is solely responsible for the content of this announcement. DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- Language: English Company: Prime Office REIT-AG Hopfenstra�e 4 80335 München Germany Phone: +49 (0)89 7104090 40 Fax: +49 (0)89 7104090 99 E-mail: richard.berg@prime-office.ag Internet: www.prime-office.ag ISIN: DE000PRME012 WKN: PRME01 Indices: SDAX Listed: Regulierter Markt in Frankfurt (Prime Standard), München, Stuttgart; Freiverkehr in Berlin, Düsseldorf End of News DGAP News-Service --------------------------------------------------------------------- 247678 13.01.2014