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REIT owner gets 3rd bid


A third potential buyer entered the fray for Town & Country Trust yesterday, proposing the highest price yet for the Baltimore apartment complex owner and raising the prospects for a spirited fight.

In a surprise move, Berkshire Property Advisors LLC, a private Boston-based company that also manages apartments, submitted a proposal for an offer to acquire Town & Country for $37 a share in cash.

Berkshire's offer was disclosed an hour after the Baltimore company announced that Oriole Partnership LLC had made its anticipated $36-a-share offer official. The all-cash offer by Oriole, a joint venture of Essex Property Trust, AEW Capital Management and UBS Wealth Management, had been expected since Sunday, when Town & Country disclosed it had received its proposal.

Shares of Town & Country shot up on the news, gaining $1.88 - or more than 5 percent - to close at $38.64 yesterday.

Both Berkshire's and Oriole's offers eclipse the $33.90-a-share buyout that Town & Country had accepted in December from a joint venture of Morgan Stanley Real Estate and Onex Real Estate. That offer, which valued the company at $1.3 billion, represented a 16.5 percent premium to Town & Country's average closing price for the previous two months.

Town & Country disclosed Oriole's formal bid yesterday and said it would consider it by the Feb. 8 deadline. It subsequently made a regulatory filing disclosing the Berkshire proposal.

In its filing with the Securities and Exchange Commission, Town & Country said Berkshire expects to complete its due diligence and could make a formal bid within 21 days.

One analyst said yesterday that he was surprised the bidding had gotten as high as it has.

"I never would have guessed it would have gotten to this point," said Richard Anderson, an analyst with Harris Nesbitt in New York. "People are seeing something we're clearly not seeing."

Anderson said Town & Country's complexes were well-located, but "they're old, and they look old." The bidders, he continued, were likely figuring that an investment to refurbish the properties could increase their value.

In general, he said, there's increasing interest in acquiring apartments as baby boomers age, because "retirees are the most-likely-to-rent cohort."

Berkshire, Oriole and Morgan Stanley-Onex declined to comment. Town & Country officials did not return phone calls.

Whether or not there's a higher bid, the scenarios are complex.

Oriole said its $36 offer would be on the table until Wednesday.

Under the terms of its original deal, the Morgan Stanley-Onex group has three business days to review any offer and match it.

If Town & Country accepts a higher offer, Morgan Stanley-Onex would collect a $20 million breakup fee, which Oriole has said it would pay.

Also, the Morgan Stanley-Onex team has questioned whether a financial firm hired by Town & Country in 2004 might have improperly used information to aid the Oriole bid, according to a Town & Country SEC filing Monday.

That raises the possibility that the original buyer could seek to enforce the $33.90-a-share deal.

The Morgan Stanley-Onex group yesterday issued a press release saying, "We are currently reviewing our options, and we expect to make further announcements as appropriate."

Privately owned Berkshire Property Advisors manages more than 18,000 units, from Maryland to Florida and in Texas, according to the company's Web site.

Berkshire Maryland properties are Century Apartments in Cockeysville, Olde Forge in Baltimore, Chesapeake at the Berkshires in Glen Burnie, Dorsey's Forge and Hannibal Grove in Columbia, the Berkshires at Harpers Mill in Millersville, the Seasons in Laurel, Country Place in Burtonsville and Westchester West Apartments in Silver Spring.

Town & Country owns 39 apartment complexes - 18 of them in the Baltimore area - with 13,300 units.


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