CAPITAL TRUST TO SELL INVESTMENT MANAGEMENT PLATFORM TO
Blackstone to Manage Capital Trust and Acquire 18% Stake
$2.00 Special Dividend to be Paid to Capital Trust Shareholders
New York, NYSeptember 27, 2012 Capital Trust, Inc. (NYSE: CT) (Capital Trust) today announced a definitive agreement under which an affiliate of
Blackstone (NYSE: BX) will acquire its investment management business, operated through its subsidiary, CT Investment Management Co., LLC (CTIMCO). Under the terms of the agreement, Blackstone will acquire
CTIMCO and its fund co-investments for $20 million. Blackstone will also manage Capital Trust and purchase an 18.2% equity stake in the company. Following the closing, CTIMCO will be integrated into Blackstones Real Estate Debt Strategies
In conjunction with the transaction, Capital Trust will declare a $2.00 per share special cash
dividend, which will be payable as soon as practicable following closing to shareholders of record entitled to vote at a special meeting of shareholders that will be called to approve the transaction. The sources of funds for the special dividend
will be cash on hand prior to the transaction and the proceeds from the sale of CTIMCO and related fund co-investments.
its acquisition of CTIMCO, Blackstone will purchase five million shares of newly issued Capital Trust common stock at a price of $2.00 per share. Blackstone will not receive the special dividend given that its investment in Capital Trusts
common stock will close after the record date. The transaction equates to a $4.00 per share valuation for Capital Trust (versus the 60-day trailing average share price of $3.05 as of September 26, 2012), based upon the $2.00 per share post-dividend
issue price to Blackstone and the $2.00 per share special dividend.
Stephen Plavin, CEO of Capital Trust, commented: We believe that
Blackstonewith its unparalleled presence in the commercial real estate marketplaceis the ideal management platform for CTIMCOs commercial real estate debt businesses and that the combination of two market leaders will create a
platform extremely well positioned for growth. This is an excellent result for Capital Trusts shareholders, CTIMCO and its limited partner investors.
Michael Nash, Senior Managing Director & Chief Investment Officer of BREDS, said: This transaction will create substantial value for Capital Trusts shareholders while expanding BREDS
asset management and servicing capabilities and augmenting our industry leading commercial real estate debt platform.
Upon completion of the transaction, Capital Trust will enter into a management agreement with an affiliate
of Blackstone that will manage Capital Trust pursuant to investment guidelines and policies approved by Capital Trusts board of directors. Stephen Plavin, Geoffrey Jervis and Thomas Ruffing will continue to serve in their current executive
management roles post transaction. Capital Trusts board of directors has approved the definitive agreement and the transaction contemplated therein, which are subject to customary closing conditions, including, the affirmative vote of the
holders of a majority of the outstanding shares of common stock. W. R. Berkley and its affiliated entities, holders of approximately 17.1% of Capital Trusts common stock, have entered into a voting agreement to support the transaction. Members
of Capital Trusts board of directors and executive management and associated shareholders, holders of approximately 9.0% of Capital Trusts common stock, have also indicated their support for the transaction as shareholders. Following the
transaction, Capital Trust will continue to own its interests in CT Legacy REIT, the incentive management fee interests in CT Opportunity Partners I, as well as its retained subordinate interests in three Capital Trust sponsored CDOs.
Evercore Partners served as financial advisor to Capital Trust and its independent special committee throughout the strategic alternatives review process
and has issued a fairness opinion. Paul Hastings LLP and special counsels, Skadden, Arps, Slate, Meagher & Flom LLP and Venable LLP represented Capital Trust in the transaction. Blackstone was represented by Simpson Thacher & Bartlett LLP
and special counsel Miles & Stockbridge P.C.
About Capital Trust
Capital Trust, Inc. (NYSE:CT) is a real estate finance company
that specializes in credit sensitive structured financial products. To date, Capital Trusts investment programs have focused primarily on loans and securities backed by commercial real estate assets, investing both for its balance sheet and
for third party vehicles. Capital Trust is a real estate investment trust traded on the New York Stock Exchange under the symbol CT. Capital Trust is headquartered in New York City.
(NYSE:BX) is one of the worlds leading investment and advisory firms. Blackstone seeks to create positive economic impact and long-term value for its investors, the companies they invest in, the companies they advise and the broader global
economy. Blackstone does this through the commitment of their extraordinary people and flexible capital. Their alternative asset management businesses include the management of private equity funds, real estate funds, hedge fund solutions,
credit-oriented funds and closed-end mutual funds. Blackstone also provides various financial advisory services, including financial and strategic advisory, restructuring and reorganization advisory and fund placement services. Further information
is available at www.blackstone.com. Follow Blackstone on Twitter @Blackstone.
In connection with the proposed transaction, Capital Trust, Inc. will file a proxy statement and other documents with the Securities and Exchange
Commission (SEC). Capital Trust shareholders are advised to read the proxy statement when it becomes available because it will contain important information regarding Capital Trust and the transaction. Investors may obtain a free
copy of the proxy statement (when it becomes available) and other relevant documents filed by Capital Trust with the SEC at the SECs website at http://www.sec.gov.
Capital Trust and its directors and executive officers may be deemed, under SEC rules, to be participants in the solicitation of proxies from Capital Trusts shareholders in connection with the
transaction. Information concerning the names, affiliations and interests of Capital Trusts directors and executive officers is set forth in Capital Trusts Proxy Statement on Schedule 14A, filed with the SEC on April 30, 2012, and
will be described in the proxy statement relating to the sale and other transaction contemplated in the definitive agreement (when it becomes available).
This news release contains certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, including statements relating to future financial
results and business prospects. The forward-looking statements contained in this news release are subject to certain risks and uncertainties including, but not limited to, the potential failure to obtain required shareholder approval, the failure of
closing conditions to be satisfied and the possibility that the definitive agreement will not be consummated, the possibility that the anticipated benefits from the transaction contemplated by the definitive agreement will not be realized, or will
not be realized within the expected time period, the possibility that Capital Trust will be unable to resume its business as anticipated, the risk that Capital Trusts management team will not be integrated successfully into the Blackstone
business, the potential for disruption in CTIMCOs relationship with private equity investors resulting from the consummation of the transaction, the performance of Capital Trusts investments, the timing of collections, its capability to
repay indebtedness as it comes due, competition for servicing and investment management assignments, its ability to originate investments, the availability of capital and Capital Trusts tax status, as well as other risks indicated from time to
time in Capital Trusts Form 10-K and Form 10-Q filings with the SEC. Capital Trust and Blackstone assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events or circumstances.