As previously announced, under the terms of the Agreement and Plan of Merger, dated as of December 19, 2013 (the “Merger Agreement”), by and among Essex Property Trust, Inc. (“Essex”), BEX Portfolio, Inc., formerly known as Bronco Acquisition Sub, Inc., and BRE Properties, Inc. (“BRE”), Essex delivered a written notice to BRE (the “Notice”) that requires BRE to sell, and for certain parties designated by Essex to purchase (the “Asset Sale”), on the business day prior to the effective time of the merger, certain interests in assets of BRE and its subsidiaries identified in the Notice (the “Disposition Assets”). Essex intends to have the Disposition Assets contributed to one or more new joint ventures to be formed by BRE, and then prior to the effective time of the merger BRE will sell joint venture interests to one or more third-party joint venture partners identified by Essex. The joint ventures may also raise capital through new mortgage financing, the proceeds of which would be distributed to BRE as part of the Asset Sale. The Merger Agreement also requires that BRE make a distribution to its stockholders in an amount determined on the basis of the amount of proceeds received by BRE in connection with the Asset Sale.
Accordingly, the board of directors of BRE has authorized a conditional special dividend payable to BRE stockholders of record as of the close of business on the last business day preceding the effective time of the merger (the “Special Dividend”) in the amount of $5.15 per share of common stock. The Special Dividend is in all respects conditioned upon the closing of the Asset Sale, which is expected to occur on the business day prior to the effective time of the merger. The Merger Agreement provides that the Special Dividend will be paid within three days after the merger effective time or as promptly as practicable thereafter. As previously disclosed, the amounts distributed as this Special Dividend will reduce the cash consideration payable by Essex to BRE stockholders in the merger.