Irvine Apartment Shareholders Approve Sale of Company to Bren
As expected, shareholders voted overwhelmingly to approve billionaire developer Donald L. Bren’s buyout offer for Irvine Apartment Communities Inc.
Bren is paying $34 a share, or about $569 million, for the 16.7 million shares of stock that he doesn’t already own in the Newport Beach-based apartment developer, a real estate investment trust.
For the record:
12:00 a.m. June 10, 1999 For the Record
Los Angeles Times Thursday June 10, 1999 Orange County Edition Business Part C Page 9 Financial Desk 1 inches; 22 words Type of Material: Correction
Stock price--Irvine Apartment Communities fetched $17.50 a share in its 1993 initial public stock offering. The share price was incorrect in a story Tuesday.
The purchase price is 24% above the price of Irvine Apartment shares on Dec. 1, the day Bren made his initial proposal to acquire the company and take it private.
Bren, who is chairman of Irvine Apartment Communities, previously owned 17.9%, or 3.6 million shares, of the company, which has 20,000 rental units.
IAC will retain its name and become a subsidiary of the Irvine Co., which owns and is developing Irvine Ranch, the nation’s largest master planned community. Irvine Apartment has the exclusive right to develop apartments on the ranch.
IAC’s stock closed Monday at $33.88, up 13 cents a share, on the New York Stock Exchange. The stock will cease trading today.
Irvine Co. said it can arrange more favorable financing for the development and operation of apartments through its own lenders than through bank and Wall Street sources available to real estate investment trusts.
Overall, IAC said shareholders representing 82% of the outstanding shares approved the offer, while those owning 3%, or 591,000 shares, voted against the deal. The remaining 15% of shareholders did not vote, the company said.
During a meeting in Los Angeles on Monday, two stockholders raised concerns that Bren’s offer to take the company private was too low. They pointed out the company’s price-earnings ratio, one gauge of a stock’s worth, was much lower than for similar companies. But Bren noted that an investment firm hired by the company’s board of directors had determined that the bid was fair.
The offer turned out to be 50 cents higher than the stock’s initial public offering price of $33.50 in December 1993. The company at the time was spun off by the Irvine Co.
