SAN DIEGO and RICHMOND HEIGHTS, Ohio, April 22, 2015 /PRNewswire/ -- Shareholder rights attorneys at Robbins Arroyo LLP are investigating the proposed acquisition of Associated Estates Realty Corporation (NYSE: AEC) by Brookfield Asset Management (NYSE: BAM). On April 22, 2015, the two companies announced the signing of a definitive merger agreement pursuant to which Brookfield will acquire Associated Estates. Under the terms of the agreement, Associated Estates shareholders will receive $28.75 for each share of Associated Estates common stock.
Is the Proposed Acquisition Best for Associated Estates and Its Shareholders?
Robbins Arroyo LLP's investigation focuses on whether the board of directors at Associated Estates is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $28.75 merger consideration represents a premium of only 10.4% based on Associated Estate's closing price on March 23, 2015. This premium is significantly below the average one-month premium of nearly 20.3% for comparable transactions within the past year.
On February 3, 2015, Associated Estates reported strong quarterly earnings for its fourth quarter 2014. Net income applicable to common shares for the 2014 fiscal year rose 136% to $144.2 million compared to 2013. Net operating income for the Company's same community portfolio increased 1.9% in the fourth quarter of 2014 compared to the same period a year ago. Average occupancy for the community portfolio during the fourth quarter of 2014 was 94.3%. Additionally, Associated Estates has beat consensus analyst estimates for adjusted EPS and adjusted net income in every quarter for the past year.
In commenting on these results, Associated Estates President and Chief Executive Officer Jeffrey I. Friedman remarked, "2014 was another strong year for Associated Estates. We took decisive action to advance the interests of shareholders, optimize the portfolio and position the Company for continued growth and value creation. Through the continued execution of our proven strategic plan, we made significant progress on our portfolio transformation and extended our track record of delivering industry leading shareholder returns. Recognizing the strong performance of our portfolio, our Board was pleased to increase our quarterly dividend twice during the year, raising our annualized distribution by 10.5%, and further demonstrating our commitment to delivering value to shareholders."
In light of these facts, Robbins Arroyo LLP is examining Associated Estates' board of directors' decision to sell the company now rather than allow shareholders to continue to participate in the company's continued success and future growth prospects.
Associated Estates shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information. Associated Estates shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, [email protected], or via the shareholder information form on the firm's website.
Robbins Arroyo LLP is a nationally recognized leader in securities litigation and shareholder rights law. The law firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested.
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