First Potomac Realty to be Acquired by Government Properties Income Trust For $1.4 Billion

6/28/17

BETHESDA, Md.--(BUSINESS WIRE)--First Potomac Realty Trust (NYSE:FPO) today announced that it has entered into a definitive merger agreement with Government Properties Income Trust (NASDAQ:GOV) under which GOV will acquire all of the outstanding shares of First Potomac. The transaction, which is valued at $1.4 billion, including the assumption of debt, is expected to close prior to year end 2017.

Under the terms of the agreement, First Potomac shareholders will receive $11.15 in cash per share at the close of the transaction. This represents a premium of approximately 9.3% to First Potomac’s 30-trading day Volume Weighted Average Price ended April 24, 2017, the last trading day before media speculation regarding a potential sale of First Potomac.

“The Board of Trustees conducted a thoughtful and comprehensive review of strategic alternatives and we are pleased to reach this agreement with GOV to maximize value for shareholders,” said Robert Milkovich, Chief Executive Officer of First Potomac Realty Trust. “Over the last 18 months we have worked diligently to refine the Company’s portfolio, strengthen the balance sheet, and enhance First Potomac’s corporate governance. This transaction and the attractive value that shareholders will receive demonstrates the successful execution of these efforts and is a testament to the dedication of First Potomac’s employees.”

The transaction is subject to customary closing conditions, including approval by First Potomac shareholders at a special meeting. The Board of Trustees of First Potomac has unanimously approved the merger agreement and has recommended approval of the merger by First Potomac’s shareholders.

Advisors

Wells Fargo Securities / Eastdil Secured is acting as exclusive financial advisor to First Potomac, and Hogan Lovells US LLP is acting as legal advisor.

About First Potomac Realty Trust

First Potomac Realty Trust is a self-administered, self-managed real estate investment trust that focuses on owning, operating, developing and redeveloping office and business park properties in the greater Washington, D.C. region. FPO common shares (NYSE:FPO) are publicly traded on the New York Stock Exchange.