Global Brands Acquisition Corp. (“Global Brands”) (NYSE Amex:
GQN), a specified purpose acquisition company, announced today that
it has signed a framework agreement with Gerrity International, LLC
(the “Gerrity Group”) which sets forth the steps Global Brands will
take to continue its business as a corporation that will qualify as
a real estate investment trust (“REIT”) for U.S. federal income tax
purposes, commencing with its taxable year ending December 31,
2010. Under the terms of the framework agreement, Global Brands
will retain an executive team led by William Gerrity, Matthew
Ostrower and John Heywood, to lead Global Brands upon completion of
the contemplated transactions. Mssrs. Gerrity, Ostrower and Heywood
previously held senior management roles at the Gerrity Group, a
real estate firm specializing in retail real estate investments. It
is anticipated that, subject to stockholder approval, Global Brands
will change its name to Gerrity REIT, Inc.
Global Brands intends to invest in, acquire, own, lease,
reposition and manage a diverse portfolio of necessity-based retail
properties, including but not limited to, well-located community
and neighborhood shopping centers, anchored by national or regional
supermarkets and drugstores. The parties will seek to consummate
the transactions contemplated by the framework agreement prior to
February 28, 2010 pending approval by Global Brands stockholders
and subject to certain closing conditions.
Consummation of the transactions contemplated by the framework
agreement are conditioned upon, among other things, the approval by
Global Brands’ stockholders of certain amendments to Global Brands’
certificate of incorporation. Global Brands’ stockholders will be
asked to, among other things, (i) extend the date on which Global
Brands’ corporate existence terminates from December 6, 2009 to
February 28, 2010 (the “Extension Amendment”), and (ii) allow the
holders of shares of common stock issued in Global Brands’ initial
public offering (the “IPO”) to convert their public shares into a
pro rata portion of the funds held in Global Brands’ trust account
established at the time of the IPO if the Extension Amendment is
approved (the “Conversion”). If the Extension Amendment and the
Conversion are not approved, Global Brands’ corporate existence
will terminate except for the purposes of winding up its affairs
and liquidating, pursuant to Section 278 of the Delaware General
Corporation Law.
If the Extension Agreement and Conversion proposals are approved
subject to the limitations discussed, Global Brands will have until
February 28, 2010 to consummate the transactions contemplated by
the framework agreement. After such approvals are obtained, Global
Brands will commence an offer to exchange all of its outstanding
warrants for new warrants with different terms. The new warrants to
be offered in the warrant exchange will have an exercise price of
$12.00 per share and will expire five years from the closing date
of the transaction, unless earlier redeemed if Global Brands’ stock
price is at least $18.75 for any 20 trading days within a
30-trading day period. If holders of at least 95% of Global Brands’
outstanding public warrants do not agree to exchange their warrants
for new warrants, the transactions contemplated by the framework
agreement will not be consummated.
Also under the framework agreement, the Global Brands founders
have agreed to cancel an aggregate of 7,118,056 founders shares and
6,368,056 founders warrants. In addition, the underwriters of
Global Brands’ initial public offering have agreed to reduce a
portion of the deferred underwriting commissions owed to them,
which were originally an aggregate of $14,375,000.
“We believe that the opportunity set for core retail real estate
investing is very deep and that the leadership of the Gerrity Group
has the proven track record and investing acumen to drive
shareholder value” said Joel Horowitz, Chief Executive of Global
Brands who will retain a board seat upon completion of the
transaction. “Gerrity REIT, as a newly formed REIT, is expected to
have significant equity to invest in a capital-constrained
environment, and we expect that the in-place team at Gerrity will
be able to rapidly deploy that equity in attractive risk-adjusted
investments,” added Mr. Horowitz.
William Gerrity, who has agreed to become the Chief Executive
Officer of Gerrity REIT said, “Our initial focus will be on our
core competency of acquiring and operating necessity-based retail
properties in the Western United States, where there is currently a
large and growing backlog of shopping centers for sale. The public
capital markets have demonstrated their strength and durability. We
are excited to become an integrated publicly traded equity REIT,
which offers the optimal alignment of interests between investors
and managers and should provide the most consistent and efficient
access to long-term capital for professional real estate
organizations like ours.”
Global Brands’ Management and
Investment Team
It is anticipated that Mr. Gerrity will serve as the President
and CEO of Global Brands upon completion of the framework
transactions. Mr. Gerrity has over 25 years of experience in the
development, acquisition, management and disposition of shopping
centers in the Western United States as well as in Asia. Mr.
Gerrity has worked in partnership with Morgan Stanley, Principal
Financial Group, and the Washington State Investment Board. His
early real estate activity involved the design, development and
management of office, industrial, residential, retail and hotel
properties. In 1994, he began to specialize in shopping center and
retail properties. He managed and operated the GMS partnerships
which focused on retail assets in the western United States. Mr.
Gerrity serves on the Board of Directors of the New America
Foundation as well as on the Policy Advisory Board of the Fisher
Centre for Real Estate and Urban Economics at the University of
California at Berkeley and is a member of the International Council
of Shopping Centers and the Urban Land Institute.
It is anticipated that Mr. Ostrower will serve as Chief
Investment Officer of Global Brands upon completion of the
framework transactions. Mr. Ostrower has spent his entire career
focused on public real estate investments. Prior to joining the
Gerrity Group, he served as Managing Director and leader of Morgan
Stanley's REIT equity research team. Before joining Morgan Stanley,
he served as Portfolio Manager for Pioneer's REIT mutual fund. Mr.
Ostrower received a BA from Tufts University and a joint Masters
degree in real estate and city planning from the Massachusetts
Institute of Technology. He is a Chartered Financial Analyst. Mr.
Ostrower is also a member of the Board of Directors of
Ramco-Gershenson Properties Trust.
It is anticipated that Mr. Heywood will serve as Chief Operating
Officer of Global Brands upon completion of the framework
transactions. Mr. Heywood has over 25 years experience in real
estate and construction in Australia, Asia, the UK, the US and
Canada. His experience extends to strategic real estate planning,
post-merger integration, corporate restructuring, portfolio &
investment management and the risk management of major capital
programs. Prior to joining the Gerrity Group, Mr. Heywood was a
partner at Ernst & Young and led the firm’s real estate
advisory practice which provided SOX 404 compliance for REITs, real
estate operating companies and major corporations in the Western
US. Mr. Heywood also previously held a number of senior executive
positions with BP, Mapeley Limited and Lend Lease Real Estate
Investments. He is a member of the Urban Land Institute serving on
the Urban & Mixed Use Council and a member of the Project
Management Institute.
Morgan Stanley and Citi are advising Global Brands in the
transaction.
Conference Call Information
Global Brands and the Gerrity Group will host a conference call
at 10:00am Eastern Time today (November 9, 2009) to discuss the
proposed transactions. The call will be open to the public and can
be accessed by dialing 1-888-264-8945 for domestic callers.
International callers can access the call by dialing
1-913-312-1450. The number should be dialed at least 10 minutes
prior to the start of the call. The slides complementary to the
presentation will be available prior to the call on the website of
the SEC at www.sec.gov as part of Global Brands’ 8-K filing today.
The slides will also be available on Global Brands’ website at
www.globalbrandsacquisition.com.
A replay of the conference call will be available through
11:59am on November 23, 2009. Domestic callers may access the call
by dialing 888-203-1112 and entering 2017480 when prompted for a
passcode followed by the pound sign. International callers may
access the call by dialing 719-457-0820 and passcode 2017480
followed by the pound sign.
Global Brands Acquisition Corp.
Global Brands Acquisition Corp. is a blank check company formed
for the purpose of acquiring, through a merger, capital stock
exchange, stock purchase, asset acquisition or other similar
business combination, one or more assets or control of one or more
operating businesses. Since its initial public offering, Global
Brands’ activities have been limited to identifying and evaluating
prospective acquisition targets.
Forward-looking statements
This press release includes “forward-looking statements” within
the meaning of the safe harbor provisions of the United States
Private Securities Litigation Reform Act of 1995. Global Brands’
actual results may differ from its expectations, estimates and
projections and, consequently, you should not rely on these forward
looking statements as predictions of future events. Words such as
“expect,” “estimate,” “project,” “budget,” “forecast,”
“anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,”
“believes,” “predicts,” “potential,” “continue,” and similar
expressions are intended to identify such forward-looking
statements. These forward-looking statements include, without
limitation, Global Brands’ expectations with respect to future
performance and anticipated financial impacts of the proposed
transactions; approval of the proposed certificate of incorporation
amendments and related transactions by shareholders; consummation
of the warrant exchange; the satisfaction of the closing conditions
to the proposed transactions; and the timing of the completion of
the proposed transactions.
These forward-looking statements involve significant risks and
uncertainties that could cause the actual results to differ
materially from the expected results. Most of these factors are
outside Global Brands’ control and difficult to predict. Factors
that may cause such differences include, but are not limited to,
the possibility that the expected growth will not be realized, or
will not be realized within the expected time period, due to, among
other things, (1) the REIT environment; (2) changes in
the commercial finance and the real estate markets;
(3) general economic conditions; and (4) legislative and
regulatory changes (including changes to laws governing the
taxation of REITs). Other factors include the possibility that the
transactions contemplated by the framework agreement do not close,
including due to the failure to receive required stockholder
approvals, warrant exchange or the failure of other closing
conditions.
Global Brands cautions that the foregoing list of factors is not
exclusive. Additional information concerning these and other risk
factors is contained in Global Brands’ most recent filings with the
Securities and Exchange Commission (“SEC”). All subsequent written
and oral forward-looking statements concerning Global Brands, the
framework agreement, the related transactions or other matters and
attributable to Global Brands or any person acting on its behalf
are expressly qualified in their entirety by the cautionary
statements above. Global Brands cautions readers not to place undue
reliance upon any forward-looking statements, which speak only as
of the date made. Global Brands does not undertake or accept any
obligation or undertaking to release publicly any updates or
revisions to any forward-looking statement to reflect any change in
its expectations or any change in events, conditions or
circumstances on which any such statement is based.
Additional Information
Global Brands intends to file preliminary proxy statements with
the SEC in connection with the proposed transactions and to mail
definitive proxy statements and other relevant documents to Global
Brands stockholders. Stockholders of Global Brands and other
interested persons are advised to read, when available, the
preliminary proxy statements, and amendments thereto, and the
definitive proxy statements in connection with solicitation of
proxies for the special meetings of Global Brands’ stockholders to
be held to approve the transactions because these proxy statements
will contain important information about Global Brands and the
proposed transactions. Such persons can also read Global Brands
final prospectus from its initial public offering dated December 6,
2007, its annual report on form 10-K for the fiscal year ended
March 31, 2009, which was filed with the SEC on June 11, 2009, as
amended (“Annual Report”) and other reports as filed with the SEC,
for a description of the security holdings of Global Brands’
officers and directors and their affiliates and their other
respective interests in the successful consummation of the proposed
transaction. The definitive proxy statements will be mailed to
stockholders as of record dates to be established for voting on the
proposed transactions, certificate of incorporation amendments and
related transactions. Stockholders will also be able to obtain a
copy of the preliminary and definitive proxy statements, without
charge, once available, at the SEC’s Internet site at http://www.sec.gov or by directing a
request to: Global Brands Acquisition Corp., 11 West 42nd Street,
21st Floor, New York, NY 10036, Attention: Jay Desai, telephone
(212) 201-8371.
Participation in Solicitation
Global Brands, and its respective directors, executive officers,
affiliates and other persons may be deemed to be participants in
the solicitation of proxies for the special meetings of Global
Brands’ stockholders to approve the proposed transaction. A list of
the names of those directors and officers and descriptions of their
interests in Global Brands is contained in Global Brands’ Annual
Report. Global Brands’ stockholders may also obtain additional
information about the interests of its directors and officers in
the transactions by reading the proxy statements and other relevant
materials to be filed by Global Brands with the SEC when they
become available.
Disclaimer
This press release is not a proxy statement or solicitation of a
proxy, consent or authorization with respect to any securities or
in respect of the proposed transaction and shall not constitute an
offer to sell or a solicitation of an offer to buy the securities
of Global Brands, nor shall there be any sale of any such
securities in any state or jurisdiction in which such offer,
solicitation, or sale would be unlawful prior to registration or
qualification under the securities laws of such state or
jurisdiction.
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