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Prime Acquisition Corp. To Merge With A Newly Formed Company In Proposed $200 Million Italian Commercial Real Estate Transaction

Stocks in this article: PACQ

Details of Transaction/Business Combination

The transaction with the Target is subject to the negotiation and execution of definitive agreements with the Target and its shareholders, various agreements with bhn and other customary conditions, consents and approvals, including maintenance of Prime’s Nasdaq listing.

Under the terms of the transaction, upon satisfaction of the necessary conditions, Prime will acquire 100.0% of the Target in exchange for approximately 2.5 million newly issued ordinary shares of Prime (representing an equity value of approximately $25 million based on an agreed upon value of $10.00 per share) and Prime’s assumption of approximately $175 million of the Target’s debt, for a total transaction value of approximately $200 million.

The Target’s portfolio consists of several commercial real estate properties, primarily owned by entities controlled by one of the top five banks in Italy.

Upon closing, which is anticipated to occur in the second quarter of 2013, bhn will enter into a management agreement with Prime, whereby bhn will be responsible for managing the assets of Prime, including but not limited to selecting additional performing assets to be acquired, negotiating such acquisitions, selecting local property management companies, and disposing of the assets.

The Board of Directors (“Board”) shall consist of seven members immediately after the closing, including one person currently serving on Prime’s Board of Directors for a one-year period after the closing date. The remaining members of the Board shall be nominated by bhn. A majority of the Board will be independent, non-executive members.

As Prime will not be able to complete the business combination with bhn and the Target prior to the March 30, 2013, termination date set forth in its amended and restated memorandum and articles of association and trust agreement, Prime is filing a proxy on February 25, 2013, proposing to its shareholders an extension for a period of six months after the termination date (the “Extension”). In connection with the Extension, Prime is also allowing shareholders holding its ordinary shares issued in its IPO the opportunity to redeem their shares for a pro rata portion of the trust account established by Prime at the consummation of the IPO.

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