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Prime Retail officials consider selling

July 01, 2003|by JULIE E. GREENE

julieg@herald-mail.com

For the second time in four months, Prime Retail Inc. officials announced Monday that they had been negotiating selling the outlet centers business.

Prime Retail spokesman Steven Sless would not say with whom the negotiations were or whether they were with the same entity Prime Retail had been negotiating with over the winter.

On March 4, the company released a statement saying an exclusivity period with the negotiating party had lapsed and talks had stopped.

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Monday's announcement noted that talks of a potential sale were ongoing.

The Baltimore-based outlet center owner announced last August it had hired Houlihan Lokey Howard & Zukin Capital as a financial advisor to help company officials explore recapitalization, restructuring, financing and other alternatives to strengthen its financial position and address long-term capital requirements.

Sless acknowledged this could mean selling all or part of the company.

"The company is always trying to improve. The board of directors has an obligation to shareholders to increase shareholder value when possible," Sless said.

He would not elaborate on why company officials are considering selling the company.

In December, Prime Retail officials announced the company had paid off a $90 million mezzanine loan early. The company had taken that three-year loan from Fortress Investment Fund in December 2000 to help stave off bankruptcy.

Prime Retail officials continue to consider selling some assets, Sless said.

Prime Outlets at Hagerstown was not among the assets being marketed for sale, Sless said. Outlet centers being marketed for sale were in Naples, Fla.; Odessa, Mo.; Darien, Ga.; Gainesville, Texas; and Chattanooga, Tenn.; and in North Carolina, Sless said.

In January 2002, Prime Retail sold 70 percent of the local outlet center to a partnership consisting of Prime Retail and Estein & Associates USA Ltd.

Monday's announcement as well as the one on March 4 about previous negotiations were made public in accordance with confidentiality agreements with certain preferred stockholders.

During negotiations, company officials sought feedback about a potential sale from certain stockholders, therefore binding them to insider trading laws, Sless said.

The public announcement allows others to know the same information so those certain stockholders no longer have privileged information, Sless said.

The latest negotiation included considering approximately $115 million to the company's stockholders who wanted to sell their stock, the release states.

Under those negotiations, shareholders with Series A preferred stock could have sold their stock for $15.90 per share if both sides had agreed to the terms, according to the release.

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