-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JnXSvAV9dmOKhQRzxSYkJDzenvPhEDfwHmTswhqLvjVtgMCtpRdkwKk7CyJ+nybW pXRviZTSLAJzdjhMsizcaA== 0000921895-99-000498.txt : 19990707 0000921895-99-000498.hdr.sgml : 19990707 ACCESSION NUMBER: 0000921895-99-000498 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990622 ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990706 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MGI PROPERTIES CENTRAL INDEX KEY: 0000068330 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 046268740 STATE OF INCORPORATION: MA FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-06833 FILM NUMBER: 99659552 BUSINESS ADDRESS: STREET 1: ONE WINTHROP SQUARE CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6174226000 MAIL ADDRESS: STREET 1: ONE WINTHROP SQUARE CITY: BOSTON STATE: MA ZIP: 02110 FORMER COMPANY: FORMER CONFORMED NAME: MORTGAGE GROWTH INVESTORS DATE OF NAME CHANGE: 19880225 FORMER COMPANY: FORMER CONFORMED NAME: EASTERN SHOPPING CENTERS INC DATE OF NAME CHANGE: 19711121 8-K 1 CURRENT REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------- Form 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): June 22, 1999 ---------------------------- MGI PROPERTIES - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Massachusetts 1-6833 04-6268740 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) One Winthrop Square, Boston, Massachusetts 02110 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) Registrant's telephone number, including area code: (617) 422-6000 Item 2. Acquisition or Disposition of Assets. On June 22, 1999, the registrant, MGI Properties (NYSE: MGI) (the "Trust"), sold 53 New England commercial properties (the "Properties") to BCIA Funding Corp., a Massachusetts corporation (the "Purchaser"). A copy of the Purchase and Sale Agreement and the amendments thereto in respect the sale of the Properties are attached hereto as Exhibits 2.1*, 2.2* and 2.3*. The sale of the Properties was in furtherance of the Trust's Plan of Complete Liquidation and Termination of Trust, which was adopted by the Trust's Board of Trustees on August 12, 1998 and approved by the Trust's shareholders on October 14, 1998. In consideration for the sale of the Properties, $403,541,709 (the "Purchase Price") was paid by the Purchaser to the Trust, $395,679,514 of which was paid in cash and $7,862,195 of debt was assumed by the Purchaser. The Purchase Price was determined by arms-length negotiations between the parties and was based upon the aggregate fair market value of the 53 Properties. Item 5. Other Events. On July 1, 1999, the Trust announced that it had also completed the sale of a New Jersey office building for $18 million. A copy of the news release in respect thereof is attached hereto as Exhibit 99.1 and incorporated herein by reference. - -------- *Confidential treatment has been requested in respect of this exhibit (marked with an asterisk (*)), which exhibit has been omitted herefrom and filed separately with the Commission. -2- Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (b) Pro Forma Financial Information Pro Forma Financial Statements. (c) Exhibits Exhibit No. Exhibit 2.1* Purchase and Sale Agreement dated March 12, 1999, by and among the Trust, for itself and as agent for each of the entities listed therein, and BCIA Funding Corp. 2.2* Amendment to Purchase and Sale Agreement dated March 28, 1999. 2.3* Second Amendment to Purchase and Sale Agreement dated May 5, 1999. 99.1 Press Release dated July 1, 1999. - -------- *Confidential treatment has been requested in respect of this exhibit (marked with an asterisk (*)), which exhibit has been omitted herefrom and filed separately with the Commission. -3- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. MGI PROPERTIES (Registrant) Dated: July 2, 1999 By: /s/ Phillip C. Vitali ------------------------------------------ Name: Phillip C. Vitali Title: Executive Vice President and Treasurer (Chief Financial Officer) Dated: July 2, 1999 By: /s/ David P. Morency ------------------------------------------ Name: David P. Morency Title: Controller (Principal Accounting Officer) -4- PRO FORMA FINANCIAL STATEMENTS MGI PROPERTIES CONSOLIDATED STATEMENT OF EARNINGS Twelve Months Ended November 30, 1998 (unaudited)
As Reported Pro Forma Adjustments Pro Forma INCOME Rental $70,338,000 ($49,768,000) A $20,570,000 Interest 651,000 -- 651,000 Total income 70,989,000 (49,768,000) 21,221,000 EXPENSES Property operating expenses 16,348,000 (10,664,000) A 5,684,000 Real estate taxes 8,134,000 (6,012,000) A 2,122,000 Depreciation and amortization 10,379,000 (6,174,000) A 4,205,000 Interest 10,122,000 (6,332,000) B 3,790,000 General and administrative 3,592,000 273,000 C 3,865,000 Liquidation plan expenses 972,000 (533,000) D 439,000 Total expenses 49,547,000 (29,442,000) 20,105,000 Income before net gains 21,442,000 (20,326,000) 1,116,000 Net (loss) gains on sale of real estate assets 8,375,000 -- 8,375,000 Income before extraordinary item 29,817,000 (20,326,000) 9,491,000 Extraordinary item - prepayment of debt -- -- -- Net income $29,817,000 ($20,326,000) $9,491,000 PER SHARE DATA Basic earnings $2.17 ($1.48) $0.69 Diluted earnings $2.12 ($1.45) $0.68 Weighted average shares outstanding 13,736,729 13,736,729 13,736,729
See Note 1 of the accompanying notes to the pro forma consolidated financial statements. MGI PROPERTIES PRO FORMA CONSOLIDATED BALANCE SHEET February 28, 1999 (unaudited)
Pro Forma As Reported Adjustments Pro Forma ASSETS Real estate: Properties held for sale $365,626,000 ($263,588,000) E $102,038,000 Cash and cash equivalents 11,538,000 (1,763,000) F 9,775,000 Accounts receivable 4,414,000 (3,501,000) F 913,000 Other assets 11,437,000 (5,853,000) G 5,584,000 $393,015,000 ($274,705,000) $118,310,000 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Loans payable $125,041,000 ($89,799,000) H $35,242,000 Other liabilities 8,165,000 (3,431,000) F 4,734,000 Total liabilities 133,206,000 (93,230,000) 39,976,000 Shareholders' equity 259,809,000 (181,475,000) I 78,334,000 $393,015,000 ($274,705,000) $118,310,000
See Note 2 of the accompanying notes to the pro forma consolidated financial statements. -2- MGI PROPERTIES CONSOLIDATED STATEMENT OF EARNINGS Three Months Ended February 28, 1999 (unaudited)
Pro Forma As Reported Adjustments Pro Forma INCOME Rental $18,667,000 ($13,597,000) J $5,070,000 Interest 144,000 -- 144,000 Total income 18,811,000 (13,597,000) 5,214,000 EXPENSES Property operating expenses 4,106,000 (2,824,000) J 1,282,000 Real estate taxes 2,215,000 (1,720,000) J 495,000 Depreciation and amortization 359,000 (272,000) J 87,000 Interest 2,560,000 (1,787,000) K 773,000 General and administrative 827,000 68,000 L 895,000 Liquidation plan expenses 878,000 (141,000) M 737,000 Total expenses 10,945,000 (6,676,000) 4,269,000 Income before net gains 7,866,000 (6,921,000) 945,000 Net (loss) gains on sale of real estate assets (143,000) -- (143,000) Income before extraordinary item 7,723,000 (6,921,000) 802,000 Extraordinary item - prepayment of debt (286,000) -- (286,000) Net income $7,437,000 ($6,921,000) $516,000 PER SHARE DATA Basic earnings $0.54 ($0.50) $0.04 Diluted earnings $0.52 ($0.48) $0.04 Weighted average shares outstanding 13,770,999 13,770,999 13,770,999
See Note 3 of the accompanying notes to the pro forma consolidated financial statements. -3- NOTES TO THE PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS Note 1 The pro forma consolidated statement of earnings for the year ended November 30, 1998 presents the audited consolidated statement of earnings of MGI properties after adjusting for the impact of the sales of the properties described in Item 2 and Item 5 of the Form 8-K. The pro forma consolidated statement of earnings assumes that the disposition of the properties occurred on December 1, 1997 but does not reflect the impact of sale proceeds or the gain on sale in statement of earnings for the twelve months ended November 30, 1998. (A) The reduction in rental income, property operating expenses, real estate taxes and depreciation and amortization reflects the actual operating results for the twelve months ended November 30, 1998 for the properties sold. (B) The decrease in interest expense reflects the decrease in debt that was secured by the properties sold. In addition, to the extent that the Trust's line of credit was used to finance the acquisition of the sold properties, interest charges associated with the line have been removed. (C) The increase to general and administrative expense represents the Trust's cost of rent had its business operations not been located in one of the sold properties. (D) The decrease in liquidation plan expenses is an estimate of the costs, primarily employee severance and professional fees, that would not have been incurred had the Trust not employed the individuals that managed the sold properties and if the Trust's portfolio of properties consisted of only the thirteen remaining unsold properties. Note 2 The accompanying pro forma consolidated balance sheet as of February 28, 1999 assumes the disposition of the properties as if they occurred on February, 28, 1999, but does not reflect sale proceeds, the gain on sale or the announced distribution of $19 per share. The pro forma information is based upon the historical statements of the Trust after giving effect to the sale of these properties. (E) The adjustment to properties held for sale reflects the net carrying value of the sold properties as of February 28, 1999. (F) The adjustment to cash and cash equivalents, accounts receivable, and other liabilities represent the carrying value of operating assets associated with the properties sold. (G) The adjustment in other assets represents capitalized deferred costs such as leasing commissions and financing fees associated with the sold properties. (H) The adjustment to loans payable reflects the secured mortgage debt associated with the sold properties and the repayment of the Trust's line of credit. (I) The adjustments to shareholders equity reflect the Trust's equity on a historical cost basis for each of the properties sold. -4- NOTES TO THE PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 3 The pro forma consolidated statement of earnings for the three months ended February 28, 1999 presents the unaudited consolidated statement of earnings of MGI properties after adjusting for the impact of the sale of properties described in Item 2 and Item 5 of the Form 8-K. The pro forma consolidated statement of earnings assumes that the disposition of the properties occurred on December 1, 1998 but does not reflect the impact of sale proceeds or the gain on sale in statement of earnings for the three months ended February 28, 1999. (J) The reduction in rental income, property operating expenses, real estate taxes and depreciation and amortization reflects the actual operating results for the three months ended February 28,1999 for the properties sold. (K) The decrease in interest expense reflects the decrease in debt that was secured by the properties sold. In addition, to the extent that the Trust's line of credit was used to finance the acquisition of the sold properties, interest charges associated with the line have been removed. (L) The increase to general and administrative expense represents the Trust's cost of rent had its business operations not been located in one of the sold properties. (M) The decrease in liquidation plan expenses is an estimate of the costs, primarily employee severance and professional fees, that would not had been incurred had the Trust not employed the individuals that managed the sold properties and if the Trust's portfolio of properties consisted of only the thirteen remaining unsold properties. -5- EXHIBIT INDEX 2.1* Purchase and Sale Agreement dated March 12, 1999, by and among the Trust, for itself and as agent for each of the entities listed therein, and BCIA Funding Corp. 2.2* Amendment to Purchase and Sale Agreement dated March 28, 1999. 2.3* Second Amendment to Purchase and Sale Agreement dated May 5, 1999. 99.1 Press Release dated July 1, 1999. - -------- *Confidential treatment has been requested in respect of this exhibit (marked with and asterisk (*)), which has been omitted herefrom and filed separately with the Commission. EX-99.1 2 PRESS RELEASE FOR IMMEDIATE RELEASE July 1, 1999 MGI PROPERTIES ("MGI") SELLS NEW JERSEY OFFICE BUILDING BOSTON, MASSACHUSETTS . . . . MGI Properties (NYSE:MGI) announced that it has completed the sale of a New Jersey office building for $18 million. Following this sale, MGI owns 13 properties, which aggregate 1.1 million square feet of commercial space and 959 residential apartments. The 13 properties are being actively marketed. The current estimate of pricing with respect to the remaining properties, when added to the net proceeds of this and prior sales, is expected to result in aggregate net liquidation proceeds of between $29 and $30 per share after all fees and liquidation costs; however, no assurance can be given that per share net cash distributions will be within this range or will reach this range and no assurances can be made as to the timing of future remaining distributions. As previously announced, the Board of Trustees has declared a liquidation distribution of $19 per share payable on July 30, 1999 to shareholders of record at the close of business on July 16, 1999. This Press Release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are dependent on a number of factors which could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Such factors include, among other things, the risks of future action or inaction by the Board of Trustees with respect to the Plan of Liquidation (and the actual results thereof), including the possibility of litigation pertaining thereto; the net realizable value of and the timing of the sales of the Trust's remaining properties during the course of the liquidation; the amount and timing of liquidating distributions, changes in national and local economic and financial market conditions, as well as those factors set forth in MGI's Form 10-K for the year ended November 30, 1998, including those set forth under "Forward-Looking Statements," "Other" and Item 1 - "Adoption of Liquidation Plan," and in its most recently filed Form 10-Q. -----END PRIVACY-ENHANCED MESSAGE-----