Vornado Realty Trust (NYSE:VNO) (“Vornado”) announced today that its
Board of Trustees approved the spin-off of its subsidiary, Urban Edge
Properties (“UE”), by way of a distribution of all of UE’s outstanding
common shares to Vornado’s common shareholders and to the holders of
common limited partnership units of Vornado Realty L.P. (“VRLP”).
Following the distribution, UE will be an independent, publicly-traded
company listed on the New York Stock Exchange (the “NYSE”) under the
symbol “UE”. Vornado common shares will continue to trade on the NYSE
under the ticker symbol “VNO”.
The distribution of UE common shares is expected to occur on January 15,
2015 (the “Distribution Date”). Vornado will distribute all of its UE
common shares by way of a pro rata special distribution to Vornado
common shareholders. Immediately prior to such distribution by Vornado,
VRLP will distribute all of the outstanding UE common shares on a pro
rata basis to the holders of its common limited partnership units,
consisting of Vornado and the other common limited partners of VRLP.
Each Vornado common shareholder will be entitled to receive one UE
common share for every two Vornado common shares held as of the close of
business on January 7, 2015, the record date for the distribution (the
“Record Date”). Vornado and each of the other limited partners of VRLP
will be entitled to receive one UE common share for every two common
limited partnership units in VRLP held as of the close of business on
the Record Date. Fractional shares of UE will not be distributed, and
instead Vornado common shareholders and VRLP common limited partners
will receive cash in lieu of any fractional shares they would otherwise
be entitled to receive in the distribution. Vornado shareholders and
VRLP common limited partners are not required to take any action to
receive UE common shares in the distribution, and they will not be
required to surrender or exchange their Vornado common shares or VRLP
common limited partnership units.
The distribution is intended to qualify as tax-free for U.S. federal
income tax purposes. However, cash received by Vornado common
shareholders and VRLP common limited partnership units in lieu of
fractional common shares of UE may be taxable to such holders. UE
intends to elect and qualify to be taxed as a real estate investment
trust for U.S. federal income tax purposes.
The completion of the spin off is subject to certain conditions
including, without limitation, the Securities and Exchange Commission
(the “SEC”) declaring effective UE’s Registration Statement on Form 10
(“Form 10”) and other conditions set forth in the Separation and
Distribution Agreement filed as an exhibit to the Form 10.
Goldman, Sachs & Co. and Morgan Stanley are Vornado’s exclusive
financial advisors and Sullivan & Cromwell LLP is legal advisor to
Vornado in connection with the spin-off.
Trading of Vornado and UE Common Shares Before the Distribution Date
UE common shares will be issued in book-entry form, which means that no
physical share certificates will be issued.
In connection with the distribution, beginning on or shortly before the
Record Date and continuing up to and including through the Distribution
Date, Vornado expects that there will be three trading markets:
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In the “regular-way” market, Vornado common shares will trade with an
entitlement to the UE common shares distributed on the Distribution
Date under the symbol “VNO”. Vornado common shareholders who sell
Vornado common shares in the regular way market on or before the
Distribution Date will also sell their right to receive UE common
shares.
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In the “ex-distribution” market, Vornado common shares will trade
without the right to the UE common shares distributed on the
Distribution Date under the symbol “VNO WI”. Vornado common
shareholders who sell Vornado common shares in the ex-distribution
market on or before the Distribution Date will retain their right to
receive UE common shares in the distribution.
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In the “when-issued” market, the right to receive UE common shares
distributed on the Distribution Date will trade under the symbol “UE
WI”. Vornado common shareholder who sell the right to UE common shares
in the when-issued market on or before the Distribution Date will
retain their Vornado common shares.
Vornado anticipates that “regular-way” trading of UE common shares under
the symbol “UE” will begin on January 16, 2015, the first trading day
following the Distribution Date.
Vornado common shareholders and VRLP common limited partners are
encouraged to consult their financial advisors and tax advisors
regarding the particular consequences of the distribution in their
situation, including, without limitation, the specific implications of
selling Vornado common shares on or prior to the Distribution Date and
the applicability and effect of any U.S. federal, state, local and
foreign tax laws.
Supplemental Materials and Website
Supplemental information on the transaction, including UE’s most recent
amendment to its Form 10, is available at www.vno.com.
This press release will also be furnished to the SEC in a current report
on Form 8-K. Vornado expects to mail an information statement to all
Vornado common shareholders and VRLP common limited partners entitled to
receive the distribution of UE common shares. The information statement
is an exhibit to the Form 10 and will describe UE, including risks of
owning UE common shares and other details regarding the separation and
distribution. UE will furnish to the SEC its final Information Statement
in a current report on Form 8-K.
Vornado Realty Trust is a fully integrated equity real estate investment
trust.
Forward-Looking Statements
This press release may contain forward-looking statements that are
subject to risks and uncertainties. Forward-looking statements are not
guarantees of performance. They represent our intentions, plans,
expectations and beliefs and are subject to numerous assumptions, risks
and uncertainties. Our future results, financial condition and business
may differ materially from those expressed in these forward-looking
statements. You can find many of these statements by looking for words
such as “approximates,” “believes,” “expects,” “anticipates,”
“estimates,” “intends,” “plans,” “would,” “may” or other similar
expressions in this press release. We also note the following
forward-looking statements that have been included in this press
release: our uncertainties as to the timing of the spin-off and whether
it will be completed, the possibility that various closing conditions to
the spin-off may not be satisfied or waived, the expected tax treatment
of the spin-off, the possibility that third-party consents required to
transfer certain properties in the spin-off will not be received, the
impact of the spin-off on UE, the timing of and costs associated with
property improvements, financing commitments, and general competitive
factors. Many of the factors that will determine the outcome of these
and our other forward-looking statements are beyond our ability to
control or predict. For further discussion of factors that could
materially affect the outcome of our forward-looking statements and our
future results and financial condition, see “Item 1A. Risk Factors” and
“Cautionary Statement Concerning Forward-Looking Statements” of UE on
Form 10, as amended. You are cautioned not to place undue reliance on
our forward-looking statements, which speak only as of the date of this
press release. All subsequent written and oral forward-looking
statements attributable to us or any person on our behalf are expressly
qualified in their entirety by the cautionary statements contained or
referred to in this section. We do not undertake any obligation to
release publicly any revisions to our forward-looking statement to
reflect events or circumstances occurring after the date of this press
release.
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