SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 22, 2007
Crescent Real Estate Equities Company
(Exact name of registrant as specified in its charter)
|(State or other jurisdiction
777 Main Street, Suite 2100
Fort Worth, Texas 76102
(Address, including zip code, and telephone number, including area code, of registrants principal executive offices)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
||Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
||Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 230.14a-12)
||Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17
||Pre-commencement communications pursuant to Rule 13e-4(c) under the Securities Act
(17 CFR 230.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
On May 22, 2007, Crescent Real Estate Equities Company, a Texas real estate investment
trust (the Company), Crescent Real Estate Equities Limited Partnership, a Delaware limited
partnership (the Operating Partnership), Moon Acquisition Holdings LLC, a Delaware limited
liability company (Parent), Moon Acquisition LLC, a Delaware limited liability company and
wholly-owned subsidiary of Parent (REIT Merger Sub), and Moon Acquisition Limited Partnership, a
Delaware limited partnership of which Parent is the sole general partner (Partnership Merger Sub
and, together with Parent and REIT Merger Sub, the Buyer Parties), entered into a definitive
Agreement and Plan of Merger (the Merger Agreement) pursuant to which the Buyer Parties, all of
which are affiliates of Morgan Stanley Real Estate, will acquire the Company in an all-cash
transaction (the Transaction).
Pursuant to the terms of the Merger Agreement, at closing the Company will merge with and into
REIT Merger Sub, which will be the surviving entity (the Company Merger), and Partnership Merger
Sub will merge with and into the Operating Partnership, which will be the surviving entity (the
Partnership Merger and, together with the Company Merger, the Mergers).
Upon the effective time of the Mergers: (i) each outstanding Common Share not owned by the Company or its affiliates or not subject to dissenters rights, will automatically
be canceled and converted into the right to receive cash, without interest, equal to $22.80 per
Common Share (the Common Share Consideration), (ii) each outstanding unit of interest in the
Operating Partnership other than a Restricted Unit (a Unit) will automatically be canceled and
converted into the right to receive cash, without interest, equal to $45.60 per Unit (the Unit
Consideration), (iii) each outstanding option to purchase Common Shares or Units (an Option)
will automatically be canceled and converted into the right to receive cash equal to the product of
(x) the number of Common Shares or Units issuable upon exercise of the Option, and (y) the excess
of the Common Share Consideration or Unit Consideration, as applicable, over the exercise price of
the Option per Common Share or Unit, respectively, and (iv) each restricted unit issued under the
long-term incentive plans of the Operating (a Restricted Unit) will automatically be canceled and
converted into the right to receive $45.60 per Restricted Unit, plus accrued and unpaid dividends.
The Transaction was unanimously approved by the Companys Board of Trust Managers, which
recommended that the holders of the Common Shares approve the transaction. In addition, Mr.
Richard E. Rainwater, Chairman of the Companys Board of Trust Managers, entered into a voting
agreement pursuant to which he agreed to vote the Common Shares that he beneficially owns in favor
of Company Merger, and the Company and Crescent Real Estate Equities, Ltd., a Delaware corporation
and the sole general partner of the Operating Partnership, entered into a voting agreement pursuant
to which they agreed to vote their partnership interests in favor of the Partnership Merger, in
each case for so long as the Merger Agreement has not been terminated.
The Company, the Operating Partnership and the Buyer Parties have made various
representations, warranties and covenants in the Merger Agreement. Among other things, the Company
is subject to restrictions on its ability to solicit third-party proposals, or provide information
to and engage in discussions with such third parties. Subject to the terms of the Merger
Agreement, however, the Company may provide information and participate in discussions with respect
to any unsolicited third party proposal that the Board of Trust Managers, after consultation with its advisors
and notice to the Buyer Parties, determines is reasonably likely to be or become a Superior
Proposal as defined in the Merger Agreement.
The Merger Agreement may be terminated by the Company and/or Parent under certain
circumstances, including if the Mergers have not been consummated on or before October 31, 2007, if
the Companys shareholders do not approve the Transaction, if a party is in breach of the
representations and warranties contained in the Merger Agreement such that a condition to closing
is incapable of being satisfied, or if the Company has approved a Superior Proposal in accordance
with the Merger Agreement. In the event the Merger Agreement is terminated because the Companys
Board of Trust Managers decides to recommend a Superior Proposal to the Companys shareholders or
if the Companys shareholders do not approve the Transaction and the Company announces an
Acquisition Proposal (as defined in the Merger Agreement) before the Merger Agreement is
terminated and enters into an agreement with respect to such proposal within 12 months of the
termination of the Merger Agreement, the Company is obligated to pay a fee of $64,200,000 to
Completion of the Transaction is subject to approval by the affirmative vote of the holders of
at least two-thirds of the outstanding Common Shares, as well as to the satisfaction of certain
customary closing conditions and the
possible review and clearance of necessary filings by the Securities and Exchange Commission
and other governmental authorities. Morgan Stanley and Morgan Stanley Real Estate Funding II, L.P.
have agreed to guarantee the payment obligations of the Buyer Parties under the Merger Agreement in
the amount of up to $300,000,000.
The foregoing description of the Mergers and the Merger Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of the Merger Agreement,
which is attached as Exhibit 2.01 to this Current Report on Form 8-K.
On May 22, 2007, the Company issued a press release announcing the Mergers, a copy of which is
attached hereto as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
The following exhibits are included in this Form 8-K.
||Agreement and Plan of Merger among Crescent Real Estate Equities
Company, Crescent Real Estate Equities Limited Partnership, Moon
Acquisition Holdings LLC, Moon Acquisition LLC and Moon Acquisition
Limited Partnership, dated as of May 22, 2007
||Press Release, dated May 22, 2007, of Crescent Real Estate Equities Company relating to the execution of an Agreement and Plan of Merger
ADDITIONAL INFORMATION ABOUT THE MERGER AND WHERE TO FIND IT
The foregoing summary of the terms of the agreement between the Company and Morgan Stanley does not
purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement, which is filed as an exhibit to this Current Report on Form 8-K.
The Companys trust managers, executive officers and other members of management and employees may be
deemed to be participants in the solicitation of proxies from the shareholders of the Company in
favor of the proposed Transaction. Information about the Company and its trust managers and executive
officers, and their ownership of the Companys securities, is set forth in the Companys Amendment
to Annual Report on Form 10-K/A, which was filed with the SEC on April 30, 2007 and amended
on May 2, 2007. Additional information regarding the interests of those persons may be obtained by
reading the proxy statement when it becomes available.
In connection with the proposed merger, the Company also will file a proxy statement with the SEC and,
upon SEC clearance, will mail the proxy to shareholders. Shareholders of the Company are urged to read
the proxy statement regarding the proposed merger when it becomes available, because it will
contain important information. Shareholders will be able to obtain a copy of the proxy statement as
well as other filings containing information about the Company, when available, without charge, at the
SECs Internet site (http://www.sec.gov). In addition, copies of the proxy statement can be
obtained, when available, without charge, by directing a request to the Company via the telephone
numbers listed below.
Jane E. Mody, Managing Director and Chief Financial Officer, Crescent (817) 321-1086
Jeremy C. Sweek, Investor & Media Relations Senior Manager, Crescent (817) 321-1464
Alyson DAmbrisi, Media Relations, Morgan Stanley +44 207 425 2431
This press release may include forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements, other than statements of historical facts, included in this press release
that address activities, events or developments that the partnership expects, believes or
anticipates will or may occur in the future are forward-looking statements. These statements
subject to a number of assumptions, risks and uncertainties, many of which are beyond the control
of the Company, which may cause the Companys actual results to differ materially from those
implied or expressed by the forward-looking statements. Crescent assumes no duty whatsoever to
update these forward-looking statements or to conform them to future events or developments.