Brookfield completes tender offer for MPG Office Trust preferreds

By Jennifer Chiou

New York, Oct. 15 - Brookfield Office Properties Inc. announced that DTLA Fund Holding Co. and Brookfield DTLA Fund Properties Holding Inc. have ended their tender offer for MPG Office Trust, Inc.'s 7.625% series A cumulative redeemable preferred shares.

At the final deadline of 6 p.m. ET on Oct. 14, holders had tendered a total of 372,901 shares of MPG preferred stock, representing 3.832% of the outstanding preferreds. All validly tendered shares were accepted for purchase at $25.00 per preferred.

The tender offer was extended several times, most recently from Oct. 10 and before that from Oct. 4, Sept. 30, Sept. 23, Sept. 9, Aug. 30, Aug. 23, Aug. 16, Aug. 9, Aug. 2, July 24 and July 17.

As noted before, the company will not pay accrued dividends.

At Oct. 9, investors had tendered 80,901 shares, unchanged from the tally on Oct. 3. That compared with tenders for 86,201 preferreds on Sep. 27, 85,141 preferreds on Sept. 20, 84,441 preferreds on Sept. 13, 83,424 preferreds on Aug. 29, 73,199 preferreds on Aug. 15, 75,599 on Aug. 1 and 190,225 on July 23.

As reported on July 11, a preferred shareholder filed a class-action lawsuit challenging Brookfield's proposed acquisition of MPG and its tender offer for the preferreds.

The shareholder requested an injunction preventing the closing of either transaction until they are restructured. MPG and Brookfield agreed not to close the merger or the tender offer until the Circuit Court of Baltimore City, Md., rules on the request.

MPG has not paid any dividends to its preferred shareholders since 2008, according to a previous news release from the plaintiff's lawyers. Under the contract governing the preferreds, the company owes more than $9 per share of accrued dividends.

Brookfield's tender offer pays nothing to the preferred shareholders for the accrued dividends. The news release said that shareholders who did not participate in the tender offer will have their preferred stock canceled and converted into new preferred stock of a Brookfield-controlled entity, and Brookfield will decide whether to pay any of the accrued dividends to these non-tendering shareholders.

The lawsuit alleges that the tender offer and merger, as structured, violate the contract governing the preferred stock because the contract promises that preferred shares will not be converted without shareholder consent.

The depositary and paying agent was American Stock Transfer & Trust Co., LLC. The information agent was MacKenzie Partners, Inc. (800 322-2885).

Brookfield is a commercial real estate company with corporate offices in New York, Toronto and Sydney, Australia. Los Angeles-based MPG is an owner and operator of class A office properties.

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