Search Blog
The Deal of Grubb & Ellis Co. Proves to be Successful
On Friday, Grubb & Ellis Co., a Santa Ana-based company got an investment of $90 million for real estate brokerage and investments as its deal with institutional investors proved to be a success. The sum would help the company to pay off its debts worth $67 million that are due for November end and the rest would be put to use as working capital for the company.
The Company’s Chairman and largest shareholder, C. Michael Kojaian calls it a transformational deal for the company which will make it the most strongest capitalized company in the real estate industry. A sale of 900,000 shares of 12% preferred convertible stock is included in the deal for the institutional investors. The price of every individual share of that stock would equal to 60.6 shares of the common stock thereby offering the per share conversion price of $1.65. This resulted in a premium of 12% of the closing price on Oct 22. Investors have been given a 45-day option to purchase preferred stocks for an additional 100,000 shares.
Grubb’s institutional investors name list was kept under wraps for some time. On Friday afternoon, the shares rose up to an approximate of 20% making the market value of the company stand at approximately $120 million. By November 6, this transaction would be closed down. A deal to re-establish the potential firm with new terms that was going in debts was announced by the company in the beginning of this month. A sum of $5 million was also being raised from Kojaian side-by-side.
The company would now be able to make a payment of $27.3 million by the end of November with the help of the credit given by a unit of Deutsche Bank AG. Grubb got an option to pay off the credit line of the full $38 million and a similar line of $29 million at 65 cents on the dollar. Once the deal is signed, the dues will be paid off immediately.