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) August 31, 2006
----------------------------
BNP RESIDENTIAL PROPERTIES, INC.
-------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Maryland 1-9496 56-1574675
-------------------------------------------------------------------------------
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
301 S. College Street, Suite 3850
Charlotte, North Carolina 28202
------------------------------------------------------------ ------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (704) 944-0100
--------------------------
N/A
-------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since 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 (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ X ] 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 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On August 31, 2006, BNP Residential Properties, Inc., a Maryland
corporation ("BNP"), and BNP Residential Properties Limited Partnership, a
Delaware limited partnership (the "Operating Partnership"), entered into an
Agreement and Plan of Merger (the "Merger Agreement") pursuant to which Babcock
& Brown Bravo Holdings LLC, a Delaware limited liability company ("Buyer"),
which is an affiliate of international investment and advisory firm Babcock &
Brown (ASX:BNB) ("Babcock & Brown"), will acquire BNP through the mergers of BNP
and the Operating Partnership with merger subsidiaries of the Buyer (the
"Mergers").
Pursuant to the terms of the Merger Agreement, each issued and
outstanding share of common stock of BNP, par value $0.01 per share (together
with the related preferred stock purchase rights, the "Common Shares"), will be
converted into the right to receive $24.00 in cash, without interest, and each
common unit of limited partnership interest of the Operating Partnership
(together with the related preferred unit purchase rights, the "OP Units") will
be converted into (i) the right to receive $24.00 in cash, without interest, or
(ii) at Buyer's option, the right to elect to receive $24.00 in cash, without
interest, or a continuing interest in the Operating Partnership.
The Merger Agreement permits BNP to declare and pay regular quarterly
cash distributions at a rate not to exceed $0.26 per share of common stock
during the pendency of the Mergers. In addition, immediately prior to the
Mergers, the Merger Agreement permits BNP to set a record date for and declare
payable a special distribution. The aggregate amount of the special distribution
would equal, for the period from the record date for the previous distribution
to the record date for the special distribution, net income excluding gains
(losses) from sales of property and certain transaction fees and expenses
relating to the Mergers, plus depreciation and amortization, and after
adjustments of unconsolidated partnerships and joint ventures, all as calculated
as provided in the Merger Agreement; provided that the special distribution may
not exceed a quarterly rate (based on the number of days covered by the "stub"
period) of $0.26 per share.
The Mergers and the transactions contemplated by the Merger Agreement
have been approved by the Board of Directors of BNP on behalf of BNP, and on
behalf of BNP as the sole general partner of the Operating Partnership. The
Mergers are subject to customary closing conditions, including the approval of
the Mergers by the holders of at least a majority of the outstanding Common
Shares. The Merger Agreement contains no financing condition.
Upon termination of the Merger Agreement under certain specified
circumstances, BNP may be required to pay the Buyer a break-up fee of $12.5
million. It is currently anticipated that the Mergers will be closed in the
fourth quarter of 2006.
Certain obligations of the Buyer and its subsidiaries under the Merger
Agreement have been guaranteed by Babcock & Brown International Pty Ltd, a
subsidiary of
2
Babcock & Brown through which Babcock & Brown conducts substantially all of its
operations.
The foregoing descriptions of the Mergers and the Merger Agreement are
qualified in their entirety by reference to the text of the Merger Agreement,
which is attached hereto as Exhibit 2.1 and is incorporated herein by reference.
Copies of BNP's press releases, dated August 31, 2006, relating to the Mergers
are also attached hereto as Exhibits 99.1 and 99.2.
The following officers and directors of BNP have entered into a Voting
Agreement dated August 31, 2006 (the "Voting Agreement") with the Buyer: Paul
Chrysson, W. Michael Gilley, Philip S. Payne, D. Scott Wilkerson, Peter J.
Weidhorn, Pamela B. Bruno and Eric S. Rohm. The Voting Agreement requires each
of the foregoing individuals to vote (or cause to be voted) the Common Shares
and OP Units that each beneficially owns in favor of the approval of the Merger
Agreement and the transactions contemplated by the Merger Agreement. The Voting
Agreement terminates upon the earlier of the effective time of the Mergers or
the termination of the Merger Agreement. The foregoing description of the Voting
Agreement is qualified in its entirety by reference to the Voting Agreement,
which is attached hereto as Exhibit 10.1 and is incorporated herein by
reference.
Concurrently with the execution and delivery of the Merger Agreement,
BNP entered into an amendment (the "Rights Amendment") to the Rights Agreement,
dated as of March 18, 1999 (the "Rights Agreement"), between BNP and the rights
agent for the purpose of rendering the rights under BNP's Rights Agreement
inapplicable in the Mergers, the Voting Agreement and the other transactions
contemplated thereby, and terminating the Rights Agreement and the rights
effective upon consummation of the Mergers. The foregoing description of the
Rights Amendment is qualified in its entirety by reference to the text of the
Rights Amendment, which is attached hereto as Exhibit 4.1 and is incorporated
herein by reference.
Immediately prior to closing, the BNP management will receive payments
from BNP as a result of vesting of equity awards and bonus payments under their
pre-existing employment terms with BNP. It is expected that the BNP management
team will remain in place after the closing. Additionally, the Buyer has
negotiated to have three-year employment agreements with a one-year non-compete
provision with each of Messrs. Payne and Wilkerson and two-year employment
agreements with Ms. Bruno and Mr. Rohm (collectively, the "Employment
Agreements"). The Employment Agreements will become effective at the effective
time of the Mergers and shall be terminated if the Merger Agreement is
terminated.
ADDITIONAL INFORMATION ABOUT THE MERGERS AND WHERE TO FIND IT
In connection with the Mergers, BNP intends to file relevant materials
with the SEC, including a proxy statement. Investors and security holders of BNP
are urged to read these materials when they become available because they will
contain
3
important information about the Mergers, BNP and the affiliates of Babcock &
Brown that are parties to the merger. The proxy statement and other relevant
materials (when they become available) and any other documents filed by BNP with
the SEC may be obtained free of charge at the SEC's website at www.sec.gov. In
addition, investors and security holders may obtain free copies of the documents
filed with the SEC by BNP by contacting Andrea Burris, Director of Investor
Relations at investor.relations@bnp-residential.com or (704) 944-0100 or
accessing BNP's website at www.bnp-residential.com. Investors and security
holders are urged to read the proxy statement and the other relevant materials
when they become available before making any voting or investment decision with
respect to the Mergers.
Proxies may be solicited on behalf of BNP by members of its Board of
Directors and executive officers. Information about such persons can be found in
BNP's definitive proxy statement relating to its 2006 Annual Meeting of
Stockholders, which was filed with the SEC on April 12, 2006, and may be
obtained free of charge at the SEC's website at www.sec.gov or at BNP's website
at www.bnp-residential.com.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
2.1 Merger Agreement, dated August 31, 2006, by and among BNP Residential
Properties, Inc., BNP Residential Properties Limited Partnership,
Babcock & Brown Bravo Holdings, LLC, Babcock & Brown Bravo Acquisition
Corp. and Babcock & Brown Bravo Operating Partnership
4.1 Amendment No. 2 to Rights Agreement, dated August 31, 2006, between BNP
Residential Properties, Inc. and American Stock Transfer and Trust
Company, as rights agent
10.1 Voting Agreement, dated August 31, 2006, by and among Babcock & Brown
Bravo Holdings LLC and the directors and officers of BNP Residential
Properties, Inc. named therein in their individual capacities as
security holders
99.1 Press Release
99.2 Press Release
4
SIGNATURES
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.
BNP Residential Properties, Inc.
(Registrant)
September 6, 2006 by: /s/ Pamela B. Bruno
-----------------------------------
Pamela B. Bruno
Vice President, Treasurer and
Chief Financial Officer
5