Prime Group Realty Trust Enters Merger Agreement with Five Mile Capital Partners to Cash out Remaini

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Prime Group Realty Trust Enters Merger Agreement with Five Mile Capital Partners to Cash out Remaining Holders of Series B Preferred Shares for $5.25 Per Share

CHICAGO--(BUSINESS WIRE)-- Prime Group Realty Trust (OTC PINK: PMGEP) (the "Company") and Five Mile Capital Partners LLC ("Five Mile"), a Connecticut-based alternative investment and asset management company, announced today that affiliates of Five Mile have entered into a definitive merger agreement with the Company to acquire the balance of the Company's 9% Series B Cumulative Redeemable Preferred Shares of Beneficial Interest (the "Series B Preferred Shares") not owned by Five Mile for $5.25 in cash per share. Currently, affiliates of Five Mile own approximately 65%, or 2,616,308 of the 4,000,000 issued and outstanding, Series B Preferred Shares and all of the Company's common shares.

The all-cash merger consideration represents a premium of approximately 23.5% over the closing price of the Series B Preferred Shares on June 26, 2012, the day before the offer was first announced, and a premium of approximately 18.7% over the 30-day average closing price of the Series B Preferred Shares prior to the initial announcement of the offer.


The Company's Board of Trustees has approved the merger agreement on the unanimous recommendation of a Special Committee of Independent Trustees and intends to submit the merger for approval by the holders of the Series B Preferred Shares. The Special Committee was established by the Company's Board of Trustees to consider and evaluate the Five Mile offer and direct management of the Company and legal counsel Winston & Strawn LLP with regard to the negotiation of the terms of the merger agreement. The Special Committee has received a fairness opinion from Duff & Phelps, LLC, as financial advisor to the Company's Board of Trustees, in connection with its review and evaluation of the merger agreement.

Five Mile has agreed to reimburse all reasonable, customary and documented out-of-pocket fees and expenses payable to the Company's investment banker, financial advisor, legal counsel, tax advisor and other third-party advisors or service providers that are reasonably incurred by the Company in connection with the negotiation, execution, delivery and performance of the merger agreement with Five Mile, whether or not the transactions contemplated by the merger agreement close, excluding any costs incurred by the Company in pursuing alternative transactions with other parties.

The closing of the merger transaction is subject to various customary conditions, including the approval by at least 2/3rds of the holders of the Series B Preferred Shares. It is expected that Five Mile will vote all of its Series B Preferred Shares in favor of the merger. The transaction is not subject to any financing condition. Following completion of the transaction, which is expected to occur in the fourth quarter of 2012, the Company's Series B Preferred Shares will cease to be traded as an over-the-counter security.

The Board of Trustees will meet at a later date to set the date for the special meeting of the Company's shareholders and the record date for such meeting. After the date and record date of the special meeting are set, the Company expects to send notice of the special meeting and a proxy statement to each holder of the Series B Preferred Shares.

Duff & Phelps, LLC acted as financial advisor to the Special Committee of the Company's Board of Trustees. Winston & Strawn LLP provided legal advice to the Company and the Special Committee. Five Mile was represented by Goodwin Procter LLP.

About Prime Group Realty Trust

Prime Group Realty Trust is a self-administered and self-managed real estate investment trust (REIT) which owns, manages, leases, develops and redevelops office and industrial real estate in metropolitan Chicago. The Company currently owns 1 office property containing an aggregate of 167,756 net rentable square feet and interests in one joint venture that owns one office property comprised of approximately 1.14 million net rentable square feet. The Company leases and manages approximately 1.31 million square feet comprising all of its wholly-owned properties and its 330 N. Wabash Avenue joint venture property. For more information about Prime Group Realty Trust, contact the Company's Chicago headquarters at (312) 917-1300 or visit its website at www.pgrt.com.

About Five Mile Capital Partners

Five Mile Capital Partners LLC is an alternative investment and asset management company established in 2003. The firm specializes in investment opportunities in real estate, debt products, structured finance, asset-based lending and financial services private equity. Five Mile's Principals have significant experience, knowledge and skills relevant to the financial services industry and believe the cyclical and dynamic nature of the sector continually provides a broad opportunity for investments across the capital structure. The Firm's headquarters are based in Stamford, Connecticut with an office in New York City. Five Mile has approximately $2 billion in assets under management. For more information, visit www.fivemilecapital.com.

Notice To Investors

In connection with the proposed merger, a definitive proxy statement and other materials will be sent to the holders of the Company's 9% Series B Cumulative Redeemable Preferred Shares of Beneficial Interest seeking their approval of the proposed transaction. SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT WHEN IT IS RECEIVED BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. This communication is not a solicitation of a proxy from any security holder of Prime Group Realty Trust.

The proxy statement and other documents may also be obtained for free from Prime Group Realty Trust's website at www.pgrt.com under the Investors tab or by directing such request to Prime Group Realty Trust, Attention: Investors Relations, 330 North Wabash Avenue, Suite 2800, Chicago, Illinois 60611.

Prime Group Realty Trust's trustees, officers and employees may be deemed to be participants in the solicitation of proxies from its shareholders in connection with the proposed merger. Information concerning the interests of Prime Group Realty Trust's participants in the solicitation will be set forth in the proxy statement relating to the merger when it becomes available.

This press release contains certain forward-looking statements which involve known or unknown risks, uncertainties or other factors not under the Company's control which may cause the actual results, performance or achievement of the Company to be materially different from the results, performance or other expectations implied by these forward-looking statements.



Prime Group Realty Trust
Jeffrey Patterson
Chairman, President and CEO
312-917-1300
or
Five Mile Capital Partners LLC
James Glasgow
Managing Director
203-905-0950

KEYWORDS:   United States  North America  Connecticut  Illinois

INDUSTRY KEYWORDS:

The article Prime Group Realty Trust Enters Merger Agreement with Five Mile Capital Partners to Cash out Remaining Holders of Series B Preferred Shares for $5.25 Per Share originally appeared on Fool.com.

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