Originally created 05/29/03

Merger ends public company



With a "'til we meet again," Merry Land Properties Inc.'s chairman, Tennent Houston, concluded the company's final shareholders meeting Wednesday, marking the end to one of the few remaining public companies based in Augusta.

Hours after the morning meeting, the company's merger into Cornerstone Realty Income Trust Inc., of Richmond, Va., was made official by a vote from Merry Land shareholders.

"This turned out to be a good deal for Merry Land and Cornerstone shareholders," Merry Land President Mike Thompson said.

In the $136 million, tax-free merger, Cornerstone will issue $42 million to Merry Land's shareholders and assume $94 million of its debt and other liabilities. In exchange, Cornerstone will take over much of Merry Land's $150 million in assets, including its third-party property management business and nine apartment complexes in Charleston, S.C., and Savannah, Ga.

Merry Land executives have formed a private partnership to hold assets Cornerstone did not want - more than 3,000 acres of clay fields in Augusta and other nonapartment real estate.

The private company, called Merry Land & Investment Co. LLC, plans to continue building apartments for itself, Cornerstone and other investors.

"It started as a private company, and it's returning to a private company," said Mr. Tennent, who described the day as bittersweet. "To wind operations down and no longer be a public company - we regret that to some extent - but it's all been done to the benefit of the shareholders."

Each shareholder will receive 2.038 shares of Cornerstone common stock for each Merry Land share.

At the time of the deal, which was announced in February, the swap was worth 65 percent premium over what the Merry Land stock was worth.

Cornerstone, a real estate investment trust, also pays out an annual dividend on its shares, which Merry Land did not.

Of the 100 Merry Land employees, 95 percent will keep a job with either the new private company or Cornerstone. Nine of the 15 Augusta employees will remain in Merry Land's office on Seventh Street.

The merger is the newest evolution for the local Merry Land venture, which started more than 100 years ago and spent the past two decades listed on the New York and Nasdaq stock exchanges.

In 1981, the company first went public as Merry Land & Investment Co. when the Merry Brothers Brick & Tile Co. sold its brick works and holdings to Boral Bricks. The new company held onto the clay fields in east Augusta and received mining royalties for years.

It bought its first apartment complex in 1982 and gained real estate investment trust status in 1987.

Mr. Houston, who was Merry Land & Investment Co.'s first employee, said that the company was the biggest in terms of market value ever produced by Augusta and the only one ever traded on the New York Stock Exchange.

The company merged in 1998 with Chicago-based Equity Residential Properties Trust. A new spinoff - Merry Land Properties - was formed. Its headquarters remained in downtown Augusta, and the company was traded on the Nasdaq composite index.

The company focused on coastal cities, where they anticipated heavy demand in service sectors to support retirees.

But low interest rates spurring home purchases combined with deployed military troops resulted in a tough time for the apartment markets.

Mr. Houston said the merger with Cornerstone appeared to be the best way to increase shareholder value.

"We are proud of what the company has accomplished - both this company and its predecessor," he said. "It's hard for us to have done much better than we have."

Reach Vicky Eckenrode at (706) 823-3227 or vicky.eckenrode@augustachronicle.com.