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Campus Crest Enters Into Definitive Agreements For Sale Totaling $7.03 Per Share

The following excerpt is from the company's SEC filing.

- Total Transaction Valued at Approximately $1.9 billion -

- Harrison Street Real Estate Capital to pay $6.90 per share to Acquire Company -

- Sale of Montreal JV ownership interest for $0.13 per share -

- Transactions the Result of a Comprehensive Review Process -

- Delivers Compelling Value for Shareholders -

– Campus Crest Communities, Inc. (NYSE: CCG) (the “Company” or “Campus Crest”), today announced that it has entered into a definitive merger agreement with affiliates of Harrison Street Real Estate Capital, LLC (“Harrison Street”) p ursuant to which Harrison Street will acquire all issued and outstanding shares of common stock of Campus Crest in a transaction involving total estimated merger consideration of $7.03 per share, which amount includes net sale proceeds currently estimated to be valued at up to $0.13 per share (based on current exchange rates) from the separate sale of the Company’s ownership interest in its evo Montreal joint venture (“Montreal Sale”). Including the assumption or repayment of various indebtedness of Campus Crest, the overall transaction value is $1.9 billion. The merger agreement was unanimously approved by the Board of Directors of the Company.

Under the terms of the merger agreement, the final merger consideration will be determined following the closing of the Montreal Sale, currently expected to occur before October 30, 2015, pursuant to a sale agreement with the Company’s joint venture partner (the “Montreal Sale Agreement”). Assuming the Montreal Sale is consummated on the terms and conditions set forth in the Montreal Sale Agreement, the total per share consideration to be received by Campus Crest shareholders is estimated to be $7.03 per share, consisting of $6.90 per share in cash (the “Cash Consideration”), plus a pro-rata portion of the net proceeds from the Montreal Sale (the “Contingent Consideration”), currently estimated to be $0.13 per share based on current exchange rates.

The Cash Consideration and the Contingent Consideration could be considerably less if the Montreal Sale is not closed prior to the closing of the merger, or if the Company sells the Montreal joint venture interests on terms other than those currently provided for in the Montreal Sale Agreement. If the proceeds of the Montreal Sale are insufficient to fully satisfy the outstanding debt on the properties owned by the Montreal joint venture, then the Company would be obligated to contribute to the repayment of the deficiency in accordance with its outstanding guaranty of the debt, currently approximately CAD$56.0 million. In such event, the Cash Consideration per share would be reduced by a pro-rata portion of the amount necessary to discharge the guaranty.

If the Montreal Sale does not occur prior to the closing of the merger with Harrison Street, the merger agreement provides for the creation of a non-transferrable contingent value right (“CVR”) whereby shareholders will receive approximately $6.23 per share in cash at the closing of the merger (based upon current exchange rates) and one CVR per share. If the CVRs are issued, a representative of the shareholders will be authorized to conduct a sale of the Montreal joint venture and each CVR will represent a share of the net proceeds from the sale of the Montreal joint venture and release of the Company’s guaranty of the joint venture’s indebtedness. Though dependent upon the final sales price of Campus Crest’s interest in the evo Montreal properties, the Company currently estimates the value of the CVR at approximately $0.80 per share based on the expected sales price of the Montreal properties and current exchange rates. If the net proceeds from the sale of the Montreal properties are lower than expected or are not sufficient to pay off the guaranteed indebtedness, then the value of the CVR could be substantially less.

The total estimated consideration represents a 24% premium over the most recent closing stock price on October 16, 2015, and a 35% premium over the Company’s 60-day volume weighted average price.

Richard Kahlbaugh, Non-Executive Chairman of Campus Crest, said, “Beginning in October of 2014, our Board initiated an undertaking to simplify the business model...