NEWTON, Mass.--(BUSINESS WIRE)--
Government Properties Income Trust (NYSE: GOV) today announced that it
has purchased 21,500,000 common shares of Select Income REIT (NYSE:
SIR). The purchase price was equal to approximately $677.5 million, or
$31.51 per share ($1.50 per share above SIRís closing price on July 8,
2014), plus approximately $11.3 million, or $0.53 per share, of accrued
dividends as defined in the purchase agreement (total of approximately
GOV purchased the SIR shares in a cash transaction from CommonWealth
REIT (NYSE: CWH). Both GOV and SIR are managed by Reit Management &
Research LLC (ďRMRĒ), and RMR simultaneously purchased 500,000 common
shares of SIR from CWH on the same terms as GOV.
GOVís purchase of the SIR shares was funded through borrowings under
GOVís existing $550 million unsecured revolving credit facility and
under a new $500 million unsecured term loan from Wells Fargo Bank and
Citibank, N.A. The new term loan bears interest at the rate of LIBOR
plus 175 basis points, subject to adjustments based on changes to GOVís
unsecured debt ratings. The new term loan matures in July 2015 and can
be repaid in part or whole at any time without penalty.
GOV made the following statement regarding todayís announcement:
ďWe believe that this acquisition of SIR shares is a compelling
investment opportunity for GOV and that it will add to the security and
growth of GOVís cash flows in the future. Based on SIRís Normalized
Funds From Operations and its dividend rate, GOV expects the acquisition
of the SIR shares to be immediately accretive to GOV and to remain so
after this acquisition is long term financed with an appropriate mix of
debt and equity depending upon market conditions.Ē
Citigroup Global Markets Inc. acted as exclusive financial advisor to
the Special Committee of GOVís Board of Trustees composed of Independent
Trustees of GOV who are not also trustees of SIR.
Government Properties Income Trust is a real estate investment trust, or
REIT, which primarily owns properties leased to the U.S. Government and
state governments located throughout the United States. GOV is
headquartered in Newton, MA.
WARNING REGARDING FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE STATES THAT THE NEW TERM LOAN FROM WELLSFARGO BANK
AND CITIBANK, N.A. BEARS INTEREST AT LIBOR PLUS 175 BASIS POINTS.
HOWEVER, ACTUAL COSTS UNDER THE NEW TERM LOAN WILL BE HIGHER THAN
LIBOR PLUS 175 BASIS POINTS BECAUSE OF OTHER FEES AND EXPENSES
ASSOCIATED WITH THE NEW TERM LOAN.
THIS PRESS RELEASE STATES THAT GOV BELIEVES THE ACQUISITION OF SIR
SHARES WILL ADD TO THE SECURITY AND GROWTH OF GOVíS CASH FLOWS IN THE
FUTURE. THERE IS NO GUARANTEE THAT THE ACQUISITION OF SIR SHARES WILL
ADD TO THE SECURITY OR GROWTH OF GOVíS CASH FLOWS IN THE FUTURE, AND
GOVíS CASH FLOWS MAY DECLINE IN THE FUTURE.
THIS PRESS RELEASE STATES THAT GOV EXPECTS THE ACQUISITION OF THE SIR
SHARES TO BE IMMEDIATELY ACCRETIVE TO GOV AND TO REMAIN SO AFTER THIS
ACQUISITION IS LONG TERM FINANCED WITH AN APPROPRIATE MIX OF DEBT AND
EQUITY DEPENDING UPON MARKET CONDITIONS. THE COST OF GOVíS DEBT AND
EQUITY CAPITAL WILL VARY WITH MARKET CONDITIONS THAT ARE BEYOND GOVíS
CONTROL. IF GOVíS CURRENT EXPECTATIONS ABOUT ITS FUTURE COST OF DEBT
AND EQUITY CAPITAL ARE NOT REALIZED, SUCH COSTS MAY BE HIGHER THAN GOV
NOW EXPECTS, AND IT MAY NOT BE POSSIBLE OR APPROPRIATE FOR GOV TO LONG
TERM FINANCE THE ACQUISITION OF THE SIR SHARES WITH A MIX OF DEBT AND
EQUITY CAPITAL WHICH WILL MAKE GOVíS ACQUISITION OF SIR SHARES
ACCRETIVE TO GOV. ALSO, SIRíS HISTORICAL NORMALIZED FUNDS FROM
OPERATIONS AND DIVIDEND RATE MAY CHANGE. FOR THESE REASONS, GOVíS
ACQUISITION OF THE SIR SHARES MAY REDUCE OR DILUTE GOVíS NORMALIZED
FUNDS FROM OPERATIONS.
THIS PRESS RELEASE CONTAINS STATEMENTS THAT CONSTITUTE FORWARD LOOKING
STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995 AND OTHER SECURITIES LAWS. ALSO, WHENEVER GOV USES
WORDS SUCH AS ďBELIEVEĒ, ďEXPECTĒ, ďANTICIPATEĒ, ďINTENDĒ, ďPLANĒ,
ďESTIMATEĒ, OR SIMILAR EXPRESSIONS, GOV IS MAKING FORWARD LOOKING
STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON GOVíS
PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS
ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR. GOVíS ACTUAL RESULTS MAY
DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY THESE FORWARD
LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. FOR EXAMPLE:
THE INFORMATION CONTAINED IN GOVíS FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION, OR SEC, INCLUDING UNDER ďRISK FACTORSĒ IN GOVíS
PERIODIC REPORTS, OR INCORPORATED THEREIN, IDENTIFIES OTHER IMPORTANT
FACTORS THAT COULD CAUSE GOVíS ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THOSE IN ITS FORWARD LOOKING STATEMENTS. GOVíS FILINGS WITH THE SEC ARE
AVAILABLE ON THE SECíS WEBSITE AT WWW.SEC.GOV. YOU SHOULD NOT PLACE
UNDUE RELIANCE UPON GOVíS FORWARD LOOKING STATEMENTS. EXCEPT AS REQUIRED
BY LAW, GOV DOES NOT INTEND TO UPDATE OR CHANGE ANY FORWARD LOOKING
STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
A Maryland Real Estate Investment Trust with transferable shares of
beneficial interest listed on the New York Stock Exchange.
shareholder, Trustee or officer is personally liable for any act or
obligation of the Trust.
Government Properties Income Trust
Jason Fredette, 617-219-1410
Source: Government Properties Income Trust