Highwoods Properties Rejects Unsolicited $4 Billion Takeover Bid
Posted June 29, 2006
RALEIGH, N.C. — Highwoods Properties
, one of the largest providers of real estate leasing, management, construction and development services in the Southeast, has rejected an unsolicited takeover bid worth a reported $4.4 billion.
Highwoods (NYSE: HIW) said Thursday morning that its board of directors had rejected an "unsolicited proposal" from
Capital Partners, Inc.
to buy the company. Capital Partners, which is owned by a former board member of Highwoods, is based in Orlando FL.
"Our Board of Directors strongly believes that our strategic management plan is the right course of action for the Company," said Ed Fritsch, president and chief executive officer of Highwoods, in a statement. "We believe that remaining independent and continuing to execute our well-defined Plan will provide our shareholders with more significant and sustainable long-term value. Given our Board's confidence in the strategic management plan, we are not in discussions and have no intention of entering into discussions with Capital Partners."
The company said it would have no further comment about the Capital Partners offer. A company spokesperson contacted by WRAL.com also declined further comment.
Capital Partners offered $4.4 billion for Highwoods, according to a report in The Orlando Sentinel newspaper. The $36 per share offer was nearly $3 above Highwoods ' stock closing price on Wednesday.
"We want to do this in a friendly fashion," James Heistand, chairman of Capital Partners, told the Sentinel. "We would not break up the company. We plan to operate it."
Before Highwoods issued its rejection, Heistand said he wanted to execute the deal "as quickly as possible" and added that financing for the deal was already in place.
Highwoods owns or has an interest in 417 properties covering some 35 million square feet in the Carolinas, Florida, Georgia, Iowa, Kansas, Maryland, Missouri, Tennessee and Virginia.
The company's stock traded at $33.04 on Wednesday. It has a market cap of over $1.7 billion.
Highwoods reported net earnings of nearly $31 million in 2005.
The News & Observer reported earlier this week that Capital Partners was believed to be interested in acquiring Highwoods. Capital Partners, which was formed in 1999, is led by Heistand, who joined Highwoods' board when a company he owned was acquired by Highwoods in 1997. He left the board in 2000.
Capital Partners, which is privately held, has properties in Charlotte as well as Florida, Georgia and South Carolina.
The N&O speculated that a deal for Highwoods would be worth "north of $2 billion".