An affiliate of Blackstone has completed the previously announced acquisition of Capital Trust’s investment management business, operated through its subsidiary, CT Investment Management Co (CTIMCO).
The closing followed approval today by the shareholders of Capital Trust of the transaction and all related proposals.
At the closing, affiliates of Blackstone acquired CTIMCO and related fund co-investments for USD21.4m. In addition, an affiliate of Blackstone purchased five million newly issued shares of Capital Trust’s class A common stock for USD10m (USD2.00 per share), representing 17 per cent of Capital Trust’s outstanding common stock.
Capital Trust will pay the previously announced USD2.00 per share special cash dividend on 20 December 2012. Pursuant to the New York Stock Exchange’s "due bills" trading procedure, holders of Capital Trust class A common shares (other than those newly issued to Blackstone) at the close of business on 20 December will receive the dividend payment, and the common stock will begin to trade ex-dividend on 21 December.
In conjunction with the transaction, John G Schreiber, a co-founder of Blackstone Real Estate Advisors, and Michael B. Nash, chief investment officer of Blackstone Real Estate Debt Strategies, have been appointed to Capital Trust’s board of directors as Blackstone designees. Schreiber will serve as chairman of the board. Samuel Zell, who served as chairman of the board since the company’s founding in 1997, and Edward Hyman, a director since 2005, have resigned from Capital Trust’s board of directors.
Capital Trust is now externally managed by BREDS/CT Advisor, an affiliate of Blackstone. CTIMCO and its personnel are being integrated into Blackstone’s Real Estate Debt Strategies business, an affiliate of the new CT manager. Stephen D Plavin, Geoffrey G Jervis and Thomas C Ruffing will continue to serve as Capital Trust’s chief executive officer, chief financial officer and chief credit officer, respectively while also becoming employees of an affiliate of Blackstone.
After the sale of CTIMCO and the related transactions, Capital Trust’s assets include cash, its interests in CT Legacy REIT Mezz Borrower, the incentive management fee interests in CT Opportunity Partners I, as well as its retained subordinate interests in three Capital Trust sponsored CDOs.
Evercore Partners served as financial adviser to Capital Trust and its independent special committee throughout the strategic alternatives review process and has issued a fairness opinion. Paul Hastings and special counsels, Skadden, Arps, Slate, Meagher & Flom and Venable represented Capital Trust in the transaction. Blackstone was represented by Simpson Thacher & Bartlett and special counsel Miles & Stockbridge P.C.