NorthStar Asset Management, Colony Capital And NorthStar Realty Announce Merger

Northstar Asset Management (NSAM), Colony Capital (CLNY) and NorthStar Realty (NRF) announced that they have entered into a definitive merger agreement under which the companies will combine in an all-stock merger of equals transaction to create a world-class, internally-managed, diversified real estate and investment management platform.

The transaction has been unanimously approved by the Special Committees of NSAM and NRF, and the Board of Directors of Colony. The combined company will be named "Colony NorthStar, Inc." Upon completion of the transaction, terms of which are detailed below, NSAM shareholders will own approximately 32.85%, Colony shareholders will own approximately 33.25% and NRF shareholders will own approximately 33.90% of the combined company on a fully diluted basis. NSAM shareholders will also receive, in addition to its regular quarterly dividend, a special cash dividend equal to $128 million, which represents a one-time distribution of excess NSAM taxable earnings and profits.

Upon closing of the transaction, Thomas Barrack Jr. will be Executive Chairman of the Board of Directors of Colony NorthStar, David Hamamoto will be Executive Vice Chairman, and Richard Saltzman will be Chief Executive Officer. Under the terms of the merger agreement, NSAM will redomesticate to Maryland and elect to be treated as an REIT beginning in 2017, and NRF and Colony, through a series of transactions, will merge with and into the redomesticated NSAM, which will be renamed Colony NorthStar, Inc.

NSAM shareholders will continue to own one share of Colony NorthStar common stock for each share of NSAM common stock they previously owned. Colony common shareholders will receive 1.4663 shares of Colony NorthStar's common stock for each share of Colony common stock they own, and NRF common shareholders will receive 1.0996 shares of Colony NorthStar's common stock for each share of NRF common stock they own.

Each of Colony and NRF has preferred stock outstanding and the holders of such preferred stock will receive shares of preferred stock of Colony NorthStar that are substantially similar to the preferred stock held prior to the closing of the transaction.

Disclosure: None.

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