NEWTON, Mass.--(BUSINESS WIRE)--
Government Properties Income Trust (NYSE: GOV) today announced that it
has entered an agreement to purchase 3,418,421 common shares of Select
Income REIT (NYSE: SIR) from a fund affiliated with Lakewood Capital
Management, LP ("Lakewood"). The purchase price is approximately $95.2
million, or $27.85 per share. As a result of this purchase, GOV's
ownership of SIR will increase from approximately 24.3% to approximately
28.2% of the total common shares of SIR.
Both GOV and SIR are managed by Reit Management & Research LLC ("RMR"),
and the principals of RMR have also entered agreements to purchase
195,212 common shares of SIR from Lakewood as well as approximately
4,860 common shares of SIR from William H. Lenehan, who Lakewood had
proposed as a nominee for SIR's Board of Trustees. The purchase price
for the shares to be acquired by RMR's principals is $27.85 per share.
GOV made the following statement regarding today's announcement:
"GOV views this investment as a unique opportunity to purchase a large
block of SIR shares at a reasonable premium to the trading price. GOV
believes that its continuing ownership of a significant stake in SIR
will provide security and increasing cash flows to support GOV's
dividends. GOV believes that SIR's recently completed acquisition of
Cole Corporate Income Trust and SIR's announced intention to increase
its distribution rate further justifies this increased commitment to
SIR. Also, GOV believes that this investment and the simultaneous
acquisition of additional SIR shares by RMR's principals may allow SIR
to continue with its business plans without the distraction which may
have been caused by a potential proxy contest."
GOV's purchase of the SIR shares from Lakewood will be funded using cash
on hand and drawings under GOV's unsecured revolving credit facility. In
connection with the transactions described above, Lakewood withdrew its
nomination of Mr. Lenehan for election to SIR's Board of Trustees, and
Lakewood and persons affiliated with it, including Mr. Lenehan, entered
50 year agreements not to engage in certain activities affecting SIR,
GOV and their affiliates.
Citigroup acted as financial advisor to the Special Committee of GOV's
Board of Trustees composed of Independent Trustees of GOV who are not
also trustees of SIR.
Government Properties Income Trust is a real estate investment trust, or
REIT, which primarily owns properties leased to the U.S. Government and
state governments located throughout the United States. GOV is
headquartered in Newton, MA.
WARNING CONCERNING FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE CONTAINS STATEMENTS THAT CONSTITUTE FORWARD LOOKING
STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995 AND OTHER SECURITIES LAWS. ALSO, WHENEVER GOV USES
WORDS SUCH AS "BELIEVE", "EXPECT", "ANTICIPATE", "INTEND", "PLAN",
"ESTIMATE", OR SIMILAR EXPRESSIONS, GOV IS MAKING FORWARD LOOKING
STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON GOV'S
PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS
ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR. GOV'S ACTUAL RESULTS MAY
DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY THESE FORWARD
LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. FOR EXAMPLE:
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THIS PRESS RELEASE DESCRIBES TRANSACTIONS BY WHICH GOV AND THE
PRINCIPALS OF RMR WILL ACQUIRE ADDITIONAL SIR COMMON SHARES FROM
LAKEWOOD AND MR. LENEHAN. THE CLOSING OF THESE TRANSACTIONS ARE
SUBJECT TO CERTAIN CLOSING CONDITIONS.
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THIS PRESS RELEASE STATES THAT GOV BELIEVES THAT ITS CONTINUING
OWNERSHIP OF A SIGNIFICANT STAKE IN SIR WILL PROVIDE SECURITY AND
INCREASING CASH FLOWS TO SUPPORT GOV'S DIVIDEND. THE IMPLICATIONS OF
THIS STATEMENT MAY BE THAT SIR'S DISTRIBUTION RATE WILL INCREASE AND
THAT GOV'S DIVIDENDS MAY REMAIN UNCHANGED OR INCREASE. IN FACT, THE
SIR BOARD OF TRUSTEES DETERMINES SIR'S DISTRIBUTION RATE AND DECLARES
DISTRIBUTIONS IN ITS DISCRETION AND THE GOV BOARD OF TRUSTEES
DETERMINES GOV'S DISTRIBUTION RATE AND DECLARES DISTRIBUTIONS IN ITS
DISCRETION. THE CASH FLOWS WHICH GOV RECEIVES FROM SIR ARE A MINORITY
OF GOV'S TOTAL CASH FLOWS. A LARGE MAJORITY OF GOV'S CASH FLOWS ARE
FROM RENTS RECEIVED FROM GOVERNMENT TENANTS. CURRENT GOVERNMENT
LEASING POLICIES AND FISCAL CONSTRAINTS ARE MAKING IT HARDER TO RETAIN
GOVERNMENT TENANTS. ACCORDINGLY, THERE CAN BE NO ASSURANCE THAT EITHER
SIR'S DISTRIBUTION RATE OR GOV'S DISTRIBUTION RATE WILL INCREASE. IN
FACT, GOV'S DIVIDEND MAY NOT BE MAINTAINED AND IT MAY DECLINE IN THE
FUTURE.
THE INFORMATION CONTAINED IN GOV'S FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION, OR SEC, INCLUDING UNDER "RISK FACTORS" IN GOV'S
PERIODIC REPORTS, OR INCORPORATED THEREIN, IDENTIFIES OTHER IMPORTANT
FACTORS THAT COULD CAUSE GOV'S ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THOSE IN ITS FORWARD LOOKING STATEMENTS. GOV'S FILINGS WITH THE SEC ARE
AVAILABLE ON THE SEC'S WEBSITE AT WWW.SEC.GOV.
YOU SHOULD NOT PLACE UNDUE RELIANCE UPON GOV'S FORWARD LOOKING
STATEMENTS.
EXCEPT AS REQUIRED BY LAW, GOV DOES NOT INTEND TO UPDATE OR CHANGE ANY
FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS
OR OTHERWISE.
A Maryland Real Estate Investment Trust with transferable shares of
beneficial interest listed on the New York Stock Exchange.
No shareholder, Trustee or officer is personally liable for any act
or obligation of the Trust.
Government Properties Income Trust
Jason Fredette, 617-219-1410
Director,
Investor Relations
www.govreit.com
Source: Government Properties Income Trust
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