UNITED
STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington,
D.C. 20549
__________________
FORM 8-K
__________________
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of
Report (Date of earliest event reported): December 10,
2009
AMERICAN
COMMUNITY PROPERTIES TRUST
(Exact
name of Registrant as specified in its charter)
__________________
|
Maryland
|
1-14369
|
52-2058165
|
||
|
(State
or Other Jurisdiction
of
Incorporation or Organization)
|
(Commission
File Number)
|
(I.R.S.
Employer Identification No.)
|
222
Smallwood Village Center
St.
Charles, Maryland 20602
(Address
of principal executive offices) (Zip code)
(301)
843-8600
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former name or former address, if
changed from 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)
|
|
þ
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
¨
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
|
¨
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
Item
8.01 Other Events
On or about December 1, 2009, American Community Properties Trust (“ACPT”)
mailed a definitive proxy statement relating to a special meeting of
shareholders of ACPT to be held at the Regency Furniture Stadium, Legends Club
Room, 11765 St. Linus Drive, Waldorf, Maryland, on December 22, 2009, beginning
at 10:00 a.m., local time. Shareholders of record as of November 27, 2009,
will be permitted to vote at the meeting. At the special meeting,
ACPT shareholders will be asked to consider and vote upon, among other things, a
proposal to adopt an Agreement and Plan of Merger (the “Merger Agreement”),
dated as of September 25, 2009, by and among FCP Fund I, L.P. (“FCP”), FCP/ACPT
Acquisition Company, Inc. and ACPT, as it may be amended from time to time. If
the merger described in the Merger Agreement is completed (the “Merger”), ACPT
will become a wholly-owned subsidiary of FCP, and ACPT shareholders will be
entitled to receive $7.75 in cash for each ACPT common share that they
own.
As disclosed in the definitive proxy
statement, Pennsylvania Avenue Funds, a purported ACPT shareholder, filed a
putative class action lawsuit in the Circuit Court for Charles County, Maryland
(the “Court”) on October 2, 2009 purporting to challenge the Merger. The
complaint alleged that ACPT’s trustees breached their fiduciary duties in
connection with the Merger. The complaint further alleged that FCP
aided and abetted those breaches of fiduciary duties. The complaint
sought, among other things, an order enjoining consummation of the Merger and an
award of attorney’s fees.
As disclosed in the definitive proxy
statement, Joseph M. Sullivan, a purported ACPT shareholder, filed a putative
class action lawsuit in the Court on October 23, 2009 purporting to challenge
the Merger. The complaint alleged that ACPT’s trustees breached their fiduciary
duties in connection with the Merger. The complaint further alleged
that FCP aided and abetted those breaches of fiduciary duties. The
complaint sought, among other things, an order enjoining consummation of the
Merger and an award of attorney’s fees.
On November 18, 2009, the plaintiffs
filed in each action a consolidated compliant. The consolidated
complaint named the same defendants named in the two initial complaints and
asserted the same claims for breach of fiduciary duties. The
consolidated complaint alleged further that the defendants breached fiduciary
duties in connection with the disclosures contained in the Company’s preliminary
proxy statement. On December 2, 2009, the Court entered an order
consolidating the two actions (the “Action”).
ACPT, the other defendants and the
plaintiffs entered into a memorandum of understanding dated as of December 10,
2009, regarding the settlement of the Action described above. In connection with
the settlement, the parties agreed that ACPT would make certain additional
disclosures to its shareholders beyond the information provided in the
definitive proxy statement. Those additional disclosures are set forth
below. The memorandum of understanding contemplates that the parties will enter
into a stipulation of settlement, which stipulation will be subject to customary
conditions, including court approval. If the court approves the settlement, the
settlement will resolve all of the claims that were or could have been brought
in the actions being settled, including all claims relating to the Merger, the
Merger Agreement and any disclosure made in connection therewith. In addition,
in connection with the settlement, the parties contemplate that plaintiffs’
counsel will petition the court for an award of attorneys’ fees and expenses not
to exceed $295,000, and that ACPT and the other defendants will not oppose an
award up to that amount.
ACPT and the other defendants have
vigorously denied, and continue to vigorously deny, any wrongdoing or liability
with respect to the facts and claims asserted, or which could have been
asserted, in the lawsuits described above, including that they have committed
any violations of law or breach of fiduciary duty, that they have acted
improperly in any way, or that they have any liability or owe any damages of any
kind to the plaintiffs or to the purported class, and specifically deny that any
further supplemental disclosure is required under any applicable rule, statute,
regulation or law or that the ACPT directors failed to maximize stockholder
value by entering into the Merger Agreement with FCP. The settlement is not, and
should not be construed as, an admission of wrongdoing or liability by any
defendant. However, to avoid the risk of delaying or otherwise imperiling the
Merger, and to provide additional information to ACPT’s shareholders at a time
and in a manner that would not cause any delay of the Merger, ACPT and its
directors agreed to the settlement described above. The parties considered it
desirable that the action be settled to avoid the substantial burden, expense,
risk, inconvenience and distraction of continued litigation and to fully and
finally resolve the matter.
2
ADDITIONAL
DISCLOSURES REQUIRED BY THE SETTLEMENT
Additional
Disclosure Regarding the Background of the Merger
The following disclosure replaces the
disclosure concerning the solicitation of bids by FBR in the third full
paragraph on page 28 of the Definitive Proxy Statement:
“At the Special Committee’s request,
representatives of FBR promptly began contacting parties to solicit their
interest in acquiring the Company. Representatives of FBR contacted
57 parties, including public and private real estate companies, institutional
investors and significant minority shareholders of the Company (including Mr.
Isaac), in order to determine whether they would be interested in submitting an
acquisition proposal to the Company.”
Additional
Disclosure Regarding the Opinion of the Special Committee’s Financial
Advisor
The following disclosure replaces the
disclosure under the subheading “Puerto Rico Income Producing Assets” under the
heading “Asset Level Analysis” on page 35 of the Definitive Proxy
Statement:
“Puerto Rican Income Producing
Assets. FBR analyzed the Company’s Puerto Rican income
producing assets based on the projected net operating income, with respect to
the Escorial office building property, and future distributions of a partnership
interest held by the Company expected to be generated by a capital lease held by
the partnership, each as provided by management of the Company. FBR’s
analysis indicated an implied aggregate valuation reference range for the
Company’s Puerto Rican income producing assets of approximately $7.174 million
to $8.603 million or $1.28 to $1.53 per Common Share.”
The following disclosure replaces the
disclosure under the subheading “Other Matters” under the heading “Other
Considerations” on page 36 of the Definitive Proxy Statement:
“Pursuant to an engagement letter dated
September 4, 2009, the Special Committee retained FBR as its financial advisor
in connection with, among other things, the proposed Merger. The Special
Committee engaged FBR based on FBR’s qualifications, experience and reputation
as an internationally recognized investment banking and financial advisory firm.
FBR will receive a fee for its services to the Special Committee of $1,250,000,
which is contingent upon the consummation of the Merger, of which $300,000 in
fees previously paid by the Company to FBR in connection with FBR’s prior
engagement by the Company, more fully described below, and a fee of $250,000
which became payable to FBR upon the rendering of its opinion to the Special
Committee, which are not contingent upon consummation of the Merger, are
creditable to the extent previously paid. In addition, the Company has agreed to
indemnify FBR and certain related parties for certain liabilities and other
items arising out of or related to its engagement.
From time to time, FBR and its
affiliates have in the past provided investment banking and other financial
advice and services to the Company and certain of its affiliates, including
members of the Wilson Family Shareholders and certain of their affiliates for
which FBR and its affiliates have received compensation, including, during the
last two years, having acted as financial advisor to the Company in connection
with a potential reorganization of the Company (which we refer to as the Company
Engagement) and, following the suspension and modification of that engagement,
financial advisor to certain members of the Wilson Family Shareholders in
connection with the potential sale of all or a material portion of the Common
Shares held by the Wilson Family Shareholders (which we refer to as the Wilson
Family Shareholders Engagement). . . . The Special Committee was also
aware that, prior to being engaged by the Special Committee, FBR entered into
agreements with (i) certain of the Wilson Family Shareholders terminating the
engagement period under the Wilson Family Shareholders Engagement and confirming
that FBR would not be entitled to any fees under the terms of the Wilson Family
Shareholders Engagement whether or not any sale transaction occurred after the
date of such termination and (ii) the Company terminating the engagement period
under the Company Engagement and confirming that FBR would not be entitled to
any additional fees under the terms of the Company Engagement regardless of
whether a sale transaction occurred after the date of such termination. FBR did
not receive any fees for its services pursuant to the Wilson Family Shareholder
Engagement.”
3
The
following disclosure replaces the disclosure beginning on the second paragraph
under the heading “Enterprise Level Selected Companies Analysis” on pages 34 and
35 of the Definitive Proxy Statement:
“FBR
identified a sufficient number of companies for purposes of its analysis but may
not have included all companies that might be deemed comparable to the
Company. Estimates of 2010 EBITDA for selected companies listed below
were based on publicly available research analyst estimates. The
selected multifamily real estate investment companies and their respective
Enterprise Value as a multiple of 2010E EBITDA were:
Selected
Companies Enterprise Value as a
multiple of 2010E EBITDA
Equity
Residential
17.1x
Apartment
Investment and
Management
Company
17.6x
UDR,
Inc.
16.9x
Home
Properties
Inc. 15.6x
Essex
Property Trust,
Inc. 18.2x
BRE
Properties
Inc.
17.2x
Mid-America
Real Estate
Corporation 15.2x
Associated
Estates Realty
Corporation 12.7x
FBR applied multiple ranges based on
the selected companies analysis to corresponding financial data for the Company
provided by the Company’s management. Applying multiples of 14x to
15x to the Company’s estimated 2010 EBITDA of $15.8 million, reflecting the
Company’s estimate of the Company’s proportionate interest in the estimated 2010
EBITDA of its multi-family properties, the entity level selected companies
analysis indicated an implied valuation reference range per Common Share of
$3.53 to $6.33, as compared to the Per Share Merger Consideration of
$7.75.”
The information filed under this Form
8-K shall be deemed incorporated by reference into the definitive proxy
statement.
Important
Information For Investors And Shareholders
In connection with the proposed merger,
ACPT has filed a definitive proxy statement with the SEC, which was mailed to
the ACPT shareholders on or about December 1, 2009. INVESTORS ARE
URGED TO READ THE DEFINITIVE PROXY STATEMENT (INCLUDING ALL AMENDMENTS AND
SUPPLEMENTS THERETO) AND OTHER DOCUMENTS RELATING TO THE MERGER FILED WITH THE
SEC WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT ABOUT THE
PROPOSED MERGER. You may obtain copies of all documents filed with
the SEC regarding the proposed merger, free of charge, at the SEC’s website
(http://www.sec.gov). Free copies may also be obtained from ACPT by
contacting Investor Relations by mail at American Community Properties Trust,
222 Smallwood Village Center, St. Charles, Maryland, 20602, or by going to
ACPT’s Shareholder Information page on its corporate web site at
http://www.acptrust.com/shareholder.html.
ACPT and its trustees and executive
officers may be deemed to be participants in the solicitation of proxies from
the shareholders of ACPT in connection with the Merger. Information
regarding the interests of these trustees and executive officers in the
transaction described herein will be set forth the proxy statement described
above. Additional information regarding these trustees and executive
officers is also included in ACPT’s proxy statement for its 2009 Annual Meeting
of Shareholders, which was filed with the SEC on April 30, 2009. This
document is available free of charge at the SEC’s web site at www.sec.gov, and
from ACPT by contacting Investor
4
Relations
by mail at American Community Properties Trust, 222 Smallwood Village Center,
St. Charles, Maryland, 20602, or by going to ACPT’s Shareholder Information page
on its corporate web site at
http://www.acptrust.com/shareholder.html.
Cautionary
Statement Regarding Forward-Looking Statements
This communication contains
forward-looking statements that involve numerous risks and
uncertainties. The statements contained in this communication that
are not purely historical are forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act,
including, without limitation, statements regarding the expected benefits and
closing of the proposed merger, the management of the company and the company’s
expectations, beliefs and intentions. All forward-looking statements
included in this document are based on information available to ACPT on the date
hereof. In some cases, you can identify forward-looking statements by
terminology such as “may,” “can,” “will,” “should,” “could,” “expects,” “plans,”
“anticipates,” “intends,” “believes,” “estimates,” “predicts,” “potential,”
“targets,” “goals,” “projects,” “outlook,” “continue,” “preliminary,”
“guidance,” or variations of such words, similar expressions, or the negative of
these terms or other comparable terminology. No assurance can be given that any
of the events anticipated by the forward-looking statements will transpire or
occur, or if any of them do so, what impact they will have on our results of
operations or financial condition. Accordingly, actual results may
differ materially and adversely from those expressed in any forward-looking
statements. Neither ACPT nor any other person can assume responsibility for the
accuracy and completeness of forward-looking statements. There are various
important factors that could cause actual results to differ materially from
those in any such forward-looking statements, many of which are beyond ACPT’s
control. These factors include: failure to obtain shareholder
approval of the Merger; failure to obtain, delays in obtaining or adverse
conditions contained in any required regulatory or other approvals; failure to
consummate or delay in consummating the transaction for other reasons; changes
in laws or regulations; and changes in general economic conditions. ACPT
undertakes no obligation (and expressly disclaims any such obligation) to
publicly update or revise any forward-looking statement, whether as a result of
new information, future events or otherwise. For additional information please
refer to ACPT’s most recent Form 10-K, 10-Q and 8-K reports filed with the
SEC.
5
SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
|
AMERICAN
COMMUNITY PROPERTIES TRUST
|
|
|
Date: December
11, 2009
|
By: /s/ Matthew M.
Martin
Matthew
M. Martin
Chief
Financial Officer
|
|
|