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Filed
pursuant to Rule 425 under the Securities Act of 1933, as
amended
Filed by: Brookfield Properties Corporation Subject
Company: Brookfield Homes Corporation
Exchange
Act File Number of Subject Company:
001-31524
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NEWS RELEASE
BROOKFIELD PROPERTIES ANNOUNCES PLAN TO
BECOME A
PURE-PLAY OFFICE
COMPANY
Acquiring Interest in High-Quality Australian
Office Portfolio;
Residential Land and Housing Business to
be Divested;
Company to be Renamed Brookfield Office
Properties
NEW YORK, July 30, 2010 – Brookfield Properties
Corporation (BPO: NYSE, TSX) today announced a strategic repositioning plan to
transform itself into a global pure-play office property company. The
plan includes the acquisition of an interest in a significant portfolio of
premier office properties in Australia from Brookfield Asset Management (BAM:
NYSE, TSX, Euronext) as well as the divestment of Brookfield Properties’
residential land and housing business.
“This
strategy will position Brookfield Properties at the forefront of the global
office property scene,” stated Ric Clark, president and chief executive officer
of Brookfield Properties Corporation. “Expanding internationally to dynamic
gateway cities such as Sydney, Melbourne and Perth, Australia, with similar
characteristics to our current North American markets, provides great
operational synergies.”
Clark
added: “Given its rich resource base and strong trading relationship with the
world’s fastest growing economies, investment in Australia should put Brookfield
Properties in a strong position to experience meaningful growth as the global
economies emerge from the economic downturn. Following these
transactions, Brookfield Properties will have leading office portfolios in each
of the United States, Canada and Australia, as well as a modest but growing
interest in the United Kingdom, transforming Brookfield Properties into the
global security for investors looking for ownership in premier office
assets.”
Australia
Office Transaction
Brookfield
Properties has agreed to enter into a transaction with Brookfield Asset
Management whereby Brookfield Properties will pay Brookfield Asset
Management A$1.6 billion (US$1.4 billion) for an interest in 16
premier Australian office properties comprising 8 million square feet in Sydney,
Melbourne and Perth which are 99% leased. The properties have a total value of
A$3.8 billion (US$3.4 billion).
Brookfield
Properties’ board of directors established an independent committee to assess
the transaction. The committee retained Morgan Stanley & Co., Incorporated
as its financial advisor. The independent committee unanimously recommended that
the board of directors approve the proposed transaction.
This
transaction is expected to be completed in the third quarter of 2010 following
the receipt of third party consents and approvals.
Brookfield
Properties will fund the transaction from available liquidity of US$1.3 billion
and from a US$750 million subordinate bridge acquisition facility from
Brookfield Asset Management, which will be repaid from the completion of some or
all of the following: asset sales, including a sell down of Brookfield
Properties’ equity interest in its publicly-listed company Brookfield Office
Properties Canada (TSX: BOX.UN), or other financing or capital
activities.
A
supplemental information package relating to this transaction is available on
Brookfield Properties’ website at www.brookfieldproperties.com.
Residential
Operations Disposition
As a
further step in the strategy of converting Brookfield Properties into a global
pure play office company, the company announced that it intends to divest of its
residential land and housing division. To this end, Brookfield Properties
intends to commence discussions with Brookfield Homes Corporation (NYSE: BHS)
regarding the possible merger of these operations with Brookfield
Homes. Should the merger proceed, Brookfield Properties’ equity
interest in the residential business would be converted into a listed security
in the merged entity which Brookfield Properties would then dispose of through
an offering to its shareholders. Brookfield Asset Management would commit to
acquire any shares of the merged entity that are not otherwise subscribed for in
the offering, thereby ensuring that Brookfield Properties will successfully
dispose of its residential interests and receive full proceeds.
The above
transaction would complete Brookfield Properties’ process of divesting of its
residential land and housing business that commenced with the initial creation
and distribution of Brookfield Homes in 2003. At the time, the
current, largely Canadian business was relatively small and therefore retained
within Brookfield Properties. Since that time, the operation has grown
substantially and Brookfield Properties now believes that it is appropriate to
separate the businesses, serving the dual purpose of furthering the strategic
repositioning of Brookfield Properties and enhancing the value of the
residential business through the creation of a diversified North American
residential land and housing company.
Brookfield
Homes, listed on the New York Stock Exchange with a market capitalization of
approximately US$500 million, is a land developer and home builder focused
primarily in California and the Washington, DC area
markets. Brookfield Asset Management is the owner of approximately
82% of Brookfield Homes. Brookfield Asset Management has advised that it is
supportive of the merger discussions. Any transaction would be subject to review
by Brookfield Properties’ independent committee.
Name
Change
To
reflect this strategic repositioning, Brookfield Properties Corporation will
begin operating immediately under the name “Brookfield Office Properties” and
intends to seek approval at its next shareholder meeting to change its name to
“Brookfield Office Properties Inc.” The company’s shares will continue to trade
under the ticker symbol BPO on the New York and Toronto Stock
Exchanges.
* *
*
Brookfield
Properties Profile
Brookfield
Properties owns, develops and manages premier office properties. Its current
portfolio is comprised of interests in 93 properties totaling 70 million square
feet in the downtown cores of New York, Washington, D.C., Houston, Los Angeles,
Toronto, Calgary and Ottawa, making it one of the largest owners of commercial
real estate in North America. Landmark assets include the World Financial Center
in Manhattan, Brookfield Place in Toronto, Bank of America Plaza in Los Angeles
and Bankers Hall in Calgary. The company’s common shares trade on the NYSE and
TSX under the symbol BPO. For more information, visit
www.brookfieldproperties.com.
Brookfield
Asset Management Profile
Brookfield
Asset Management, focused on property, renewable power and infrastructure
assets, has over $100 billion of assets under management and is co-listed
on the New York and Toronto Stock Exchanges under the symbol BAM and on NYSE
Euronext under the symbol BAMA. For more information, please visit our website
at www.brookfield.com
For more information, please visit
our web sites at www.brookfieldproperties.com
and www.brookfield.com
or
contact:
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Brookfield
Properties
Melissa
Coley
VP,
Investor Relations and Communications
Tel:
212-417-7215
Email: melissa.coley@brookfield.com
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Brookfield
Asset Management
Katherine
Vyse
SVP,
Investor Relations and Communications
Tel:
416-369-8246
Email:
kvyse@brookfield.com
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This
press release does not constitute the offer of any securities.
Forward-Looking
Statements
This
press release contains forward-looking statements and information within the
meaning of applicable securities legislation, including statements about Brookfield
Properties' and Brookfield
Asset Management’s beliefs
and expectations relating to the Australia office transaction and a
possible transaction involving Brookfield Properties’ residential land and
housing business and
benefits that are expected to be realized as a result of the
transactions. There can be
no assurance that any of the transactions will be consummated or that the
anticipated benefits will be realized. Although Brookfield
Properties and Brookfield Asset Management believe that the anticipated future
results, performance or achievements expressed or implied by the forward-looking
statements and information are based upon reasonable assumptions and
expectations, the reader should not place undue reliance on forward-looking
statements and information because they involve assumptions, known and unknown
risks, uncertainties and other factors which may cause the actual results,
performance or achievements of the companies to differ materially from
anticipated future results, performance or achievements expressed or implied by
such forward-looking statements and information. Accordingly, the
companies cannot give any assurance that their expectations will in fact occur
and cautions that actual results may differ materially from those in the
forward-looking statements. Factors that could cause actual results
to differ materially from those set forth in the forward-looking statements and
information include, but are not limited to, general economic conditions; local
real estate conditions, including the development of properties in close
proximity to their properties; timely leasing of newly-developed properties and
re-leasing of occupied square footage upon expiration; dependence on tenants'
financial condition; the uncertainties of real estate development and
acquisition activity; the ability to effectively integrate acquisitions;
interest rates; availability of equity and debt financing; the impact of
newly-adopted accounting principles on the companies’ accounting policies and on
period-to-period comparisons of financial results; and other risks and factors
described from time to time in the documents filed by the companies with the
securities regulators in Canada and the United States, including in Brookfield
Properties’ Annual Information Form under the heading “Business of Brookfield
Properties – Company and Real Estate Industry Risks,” and in each of the
companies’ most recent “Management’s Discussion and Analysis.” The companies
undertake no obligation to publicly update or revise any forward-looking
statements or information, whether as a result of new information, future events
or otherwise, except as required by law.