Prime Retail concludes talks with a suitor

Possible sale remains among the options

March 06, 2003|By Meredith Cohn | Meredith Cohn,SUN STAFF

Baltimore-based outlet mall owner Prime Retail Inc. said yesterday that it had ended talks with a potential buyer of the company but planned to continue pursuing alternatives, including a sale, to help it deal with debt.

A company official said yesterday that it disclosed that there had been a suitor as a matter of procedure. Shareholders who were told about the potential buyer had become bound by insider trading laws, but they were released once the information became public, according to Steven A. Sless, a company spokesman.

"Typically, when you ask preferred shareholders or any shareholders to restrict themselves, a standard arrangement is to release nonpublic information publicly so they will no longer, in effect, be insiders."

The preferred shareholders had been consulted about the potential acquisition. But the exclusive negotiating period with the potential buyer has lapsed, said Sless. He would not say if the shareholders rejected the deal.

Prime Retail has been looking for strategic alternatives such as a sale since last August, when it retained Houlihan Lokey Howard & Zukin as a financial adviser. The company, burdened by debt and lower sales and occupancy at its malls, will continue to pursue capital partners or buyers, Sless said. No time frame was specified.

The company also turned down an offer in June to sell to one of its lenders, New York-based Fortress Investment Group LLC.

"Prime will continue to look for a strategic partner to help us unleash the full potential of the company," Sless said. "However, Prime Retail is not relying on such a cash infusion to continue operating."

Prime Retail reached a financial milestone in December when it paid off a $90 million, high-interest loan, considered key to its turnaround.

The company owns or manages 38 outlet centers around the United States.

Shares of Prime Retail closed yesterday at 18 cents, up a half-cent, in over-the-counter trading. The company was delisted by the New Stock Exchange in 2001.

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