Bren Bids $34 a Share for Irvine Apartments

Billionaire real estate developer Donald Bren’s offer to take Irvine Apartment Communities Inc. private for $569 million, or $34 a share, is at the low end of the company’s estimated value, according to a regulatory report filed Thursday.

Morgan Stanley Dean Witter & Co., which advised the Newport Beach-based apartment developer on the offer, estimated the value of the assets owned by the company at between $33 and $40 a share, according to the report filed with the Securities and Exchange Commission.

The document also revealed that Bren put together the buyout bid after a rift over the company’s 1999 business plan during a board meeting in October.

Irvine Apartment’s management projected a rental growth rate of 5% for the year, but Bren, who is chairman of the company, thought the growth should be closer to 12%, the report said. He described the projected 5% growth rate as “too conservative in light of existing conditions.”

Indeed, Orange County’s robust economy is generating more jobs, which is driving up demand for rental units.

That, in turn, is pushing monthly rents higher.

In the fourth quarter last year, the typical Orange County renter paid a record $969 a month, 7% higher than a year earlier, according to RealFacts, a real estate research group.

Earlier this month, Irvine Apartment Communities accepted Bren’s sweetened offer to buy the company.

Bren raised his bid after some analysts and investors said the original offer of $32.40 a share was too low.

The $34-a-share bid exceeds the stock’s all-time high of $33.50 on Oct. 8, 1997. The company’s shares closed Thursday at $32.88 on the New York Stock Exchange, up 38 cents.

The sale is subject to the approval of investors owning at least two-thirds of Irvine Apartment’s shares.