GMH Communities sells two properties, percentage of proceeds to go to shareholders

By Lisa Kerner

Charlotte, N.C., May 29 - GMH Communities Trust completed the sale of two student housing properties, University Fields and GrandMarc at University Village, in connection with its proposed merger with American Campus Communities, Inc.

Under the companies' merger agreement, a percentage of the amount received in connection with the sale or disposition of certain student housing properties may be paid to GMH shareholders and unitholders as a special distribution immediately prior to the merger's close, a GMH news release said.

According to GMH, it expects to sell its home office to an entity owned by company chairman, chief executive officer and president Gary M. Holloway, Sr.

Proceeds from that sale may also be distributed to as part of the special distribution, it was noted in the release.

Total amount of the special distribution will be approximately $51.9 million, or about $0.728 per share/unit, if the home office sale is completed.

The special distribution is in addition to the remaining distribution to GMH shareholders and unitholders of proceeds from the sale of GMH's military housing division.

GMH also announced it entered into settlement agreements regarding the debt and has surrendered the properties to receivership with regard to the five other student housing properties.

It was already reported that GMH shareholders will receive $3.36 in cash and 0.07642 of a common share of American Campus stock, or total consideration of approximately $5.53 per share.

In February, GMH agreed to sell its military and student housing divisions in two separate transactions.

The first transaction was a securities purchase agreement with a U.S. subsidiary of Balfour Beatty plc in which Balfour will purchase all of the issued and outstanding capital stock and limited liability company interests of GMH's military housing division for $350 million in cash.

Proceeds from the sale will be used to pay off and terminate GMH's line of credit and for working capital.

In the second agreement, a subsidiary of American Campus would acquire GMH following completion of the Balfour transaction.

The merger of GMH and American Campus is contingent upon the completion of GMH's deal with Balfour.

Balfour is an engineering, construction, services and investment group based in London.

Based in Austin, Texas, American Campus is a real estate investment trust specializing in the acquisition, development and management of student housing properties in the United States.

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