UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of report (Date of earliest event reported): June 23, 2002
Konover Property Trust, Inc.
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(Exact Name of Registrant as Specified in Charter)
Maryland 1-11998 56-1819372
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(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
3434 Kildaire Farm Road
Suite 200
Raleigh, North Carolina 27606
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(Address of Principal Executive Offices, including Zip Code)
Registrant's telephone number, including area code: (919) 372-3000
N/A
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(Former Name or Former Address, if Changed Since Last Report)
Item 1(b). Changes in Control of Registrant.
On June 23, 2002, Konover Property Trust, Inc. ("Konover"), a Maryland
corporation, and PSCO Acquisition Corp. ("Buyer"), a Maryland corporation owned
by Prometheus Southeast Retail Trust ("PSRT"), a Maryland real estate investment
trust, and Kimkon Inc. ("Kimkon"), an indirect wholly owned subsidiary of Kimco
Realty Corporation, a Maryland corporation, entered into a definitive merger
agreement ("Merger Agreement") pursuant to which, subject to the terms and
conditions of the Merger Agreement, Buyer will merge with and into Konover
("Merger"). Konover will be the surviving corporation in the Merger ("Surviving
Corporation").
Under the terms of the Merger Agreement, each holder of Konover common
stock (other than Buyer) will receive cash in the amount of $2.10 per share, and
each holder of Konover Series A Convertible Preferred Stock will receive either
(a) if such holder properly elects, 3.045244 shares of a newly created series of
convertible preferred stock of the Surviving Corporation designated "Series A
Convertible Preferred Stock" (the "New Preferred Stock"), or (b) if such holder
property elects, or fails to make a proper election to receive the security
described in clause (a), cash in the amount of $6.395 per share. The terms of
the New Preferred Stock will be as set forth in the form of charter of the
Surviving Corporation, which is filed as an exhibit hereto and which will be the
charter of the Surviving Corporation as of the effective time of the Merger. In
addition immediately prior to the consummation of the Merger, Konover will
effect a recapitalization of KPT Properties, L.P., the operating partnership
through which Konover conducts substantially all of its business, pursuant to
which each holder of a unit of limited partnership interest (other than Konover
and its subsidiaries) will receive cash in the amount of $2.10 per unit.
Concurrently with execution of the Merger Agreement, Konover has
entered into a voting agreement with both of the shareholders of Buyer, PSRT and
Kimkon, dated June 23, 2002 ("Voting Agreement"). Pursuant to the Voting
Agreement, on the terms and subject to the conditions set forth therein, PSRT
has agreed that at any meeting of stockholders of Konover, or in connection with
any vote or consent of the stockholders of Konover, the purpose of which is to
approve the Merger, PSRT will vote all of the shares of Konover's common stock
beneficially owned by it in favor of the approval and adoption of the Merger and
against any action or agreement that would compete with, impede or interfere
with the adoption of the Merger Agreement and the timely consummation of the
Merger. The Voting Agreement terminates upon the earlier of (a) the day on which
the Merger Agreement is terminated in accordance with its terms and (b) the
effective time of the Merger. PSRT currently controls 21,052,631 shares of
Konover's common stock, or approximately 66% of the outstanding common stock and
voting power of Konover.
In connection with its execution of the Merger Agreement and the Voting
Agreement, Konover has also entered into a supplemental voting and tender
agreement, dated June 23, 2002, with PSRT ("Supplemental Voting Agreement").
Pursuant to the Supplemental Voting Agreement, on the terms and subject to the
conditions set forth
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therein, PSRT agreed that, at any meeting of stockholders of Konover, or in
connection with any vote or consent of the stockholders of Konover, the purpose
of which is to approve a Superior Transaction (as defined in the Supplemental
Voting Agreement), PSRT will vote all of the shares of Konover's common stock
beneficially owned by it in favor of the approval and adoption of the Superior
Transaction, and if the Superior Transaction consists of a tender offer, PSRT
will tender its shares in connection with such tender offer.
Buyer, PSRT, Kimkon and other affiliated entities entered into a
co-investment agreement, dated June 23, 2002 ("Co-Investment Agreement")
pursuant to which, on the terms and subject to the conditions set forth therein,
PSRT has agreed to contribute to Buyer immediately before consummation of the
merger (a) 16,615,922 of PSRT's shares of Konover common stock (the "PSRT Stock
Contribution") and (b) all of PSRT's rights and obligations under the Contingent
Value Right Agreement, dated as of February 24, 1998, between Konover and PSRT
(as assignee) in exchange for an additional equity interest in Buyer. Pursuant
to the Co-Investment Agreement, Kimkon has agreed to contribute to Buyer
immediately before consummation of the merger cash in the amount of
$35,554,438.50 (subject to adjustment) in exchange for an additional equity
interest in Buyer.
As one of the conditions to the Merger, Messrs. Eberle, Konover,
Maloney, Orr and Schonberger and Ms. Goldberg, the Konover directors who are not
affiliated with PSRT, will resign from Konover's Board of Directors effective as
of the effective time of the Merger.
The foregoing information is qualified in its entirety by reference to
the Merger Agreement and the additional related agreements that are attached as
exhibits hereto and are incorporated herein in their entirety by reference.
The proposed transaction will be submitted to Konover's stockholders
for their consideration, and Konover will file with the SEC a proxy statement to
be used to solicit its stockholders' approval of the proposed transaction, as
well as a Schedule 13E-3 Transaction Statement with respect thereto.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
The following exhibits are filed herewith:
Exhibit No. Description
2 Agreement and Plan of Merger, dated as of
June 23, 2002, between PSCO Acquisition Corp.
and
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Konover Property Trust, Inc. (incorporated herein
by reference to Exhibit 1 of the Form 13D filed
by Lazard Freres Real Estate Investors L.L.C.
with the Commission on June 24, 2002, SEC File
No. 005-45054).
99.1 Voting Agreement, dated as of June 23, 2002,
among Prometheus Southeast Retail Trust, Kimkon,
Inc. and Konover Property Trust, Inc.
(incorporated herein by reference to Exhibit 4 of
the Form 13D filed by Lazard Freres Real Estate
Investors L.L.C. with the Commission on June 24,
2002, SEC File No. 005-45054).
99.2 Supplemental Voting and Tender Agreement, dated
as of June 23, 2002, between Prometheus Southeast
Retail Trust and Konover Property Trust, Inc.
(incorporated herein by reference to Exhibit 5 of
the Form 13D filed by Lazard Freres Real Estate
Investors L.L.C. with the Commission on June 24,
2002, SEC File No. 005-45054).
99.3 Co-Investment Agreement dated as of June 23,
2002, by and among PSCO Acquisition Corp.,
Prometheus Southeast Retail Trust, Kimcon Inc.
and the other parties named therein (incorporated
herein by reference to Exhibit 3 of the Form 13D
filed by Lazard Freres Real Estate Investors
L.L.C. with the Commission on June 24, 2002, SEC
File No. 005-45054).
99.4 Form of Charter of the Surviving Corporation
(incorporated herein by reference to Exhibit 2 of
the Form 13D filed by Lazard Freres Real Estate
Investors L.L.C. with the Commission on June 24,
2002, SEC File No. 005-45054).
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SIGNATURE
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, thereunto duly authorized.
Date: June 25, 2002
Konover Property Trust, Inc.
By: /s/ Daniel J. Kelly
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Daniel J. Kelly
Executive Vice President,
Chief Financial Officer
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EXHIBIT INDEX
The following exhibits are filed as part of this Report.
Exhibit No. Description Page No.
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2 Agreement and Plan of Merger, dated as of June 23, 2002,
between PSCO Acquisition Corp. and Konover Property Trust,
Inc. (incorporated herein by reference to Exhibit 1 of the
Form 13D filed by Lazard Freres Real Estate Investors
L.L.C. with the Commission on June 24, 2002, SEC File No.
005-45054).
99.1 Voting Agreement, dated as of June 23, 2002, among
Prometheus Southeast Retail Trust, Kimkon, Inc. and Konover
Property Trust, Inc. (incorporated herein by reference to
Exhibit 4 of the Form 13D filed by Lazard Freres Real
Estate Investors L.L.C. with the Commission on June 24,
2002, SEC File No. 005-45054).
99.2 Supplemental Voting and Tender Agreement, dated as of June
23, 2002, between Prometheus Southeast Retail Trust and
Konover Property Trust, Inc. (incorporated herein by
reference to Exhibit 5 of the Form 13D filed by Lazard
Freres Real Estate Investors L.L.C. with the Commission on
June 24, 2002, SEC File No. 005-45054).
99.3 Co-Investment Agreement dated as of June 23, 2002, by and
among PSCO Acquisition Corp., Prometheus Southeast Retail
Trust, Kimcon Inc. and the other parties named therein
(incorporated herein by reference to Exhibit 3 of the Form
13D filed by Lazard Freres Real Estate Investors L.L.C.
with the Commission on June 24, 2002, SEC File No.
005-45054).
99.4 Form of Charter of the Surviving Corporation (incorporated
herein by reference to Exhibit 2 of the Form 13D filed by
Lazard Freres Real Estate Investors L.L.C. with the
Commission on June 24, 2002, SEC File No. 005-45054).
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