[LETTERHEAD OF HOMESTEAD VILLAGE LETTERHEAD]
May 9, 2000
Homestead Village Incorporated
0000 XxxxxXxxx Xxxxxxx, Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Dear Stockholder:
On May 2, 2000, Homestead Village Incorporated, a Maryland corporation
("Homestead"), and Security Capital Group Incorporated, a Maryland corporation
("Security Capital"), entered into a merger agreement providing for the
acquisition of all of the outstanding shares of Homestead and associated
Preferred Share Purchase Rights not already owned by Security Capital and its
subsidiaries at $4.10 per share, net to the seller in cash (less any required
withholding taxes), without interest thereon.
Security Capital has today commenced a cash tender offer for all outstanding
shares of Homestead common stock and associated Preferred Share Purchase
Rights not already owned by Security Capital and its subsidiaries, at a price
of $4.10 per share, net to the seller in cash (less any required withholding
taxes), without interest thereon. The merger agreement provides that,
following the tender offer, a newly formed indirect wholly owned subsidiary of
Security Capital will merge with and into Homestead and any remaining shares
of common stock of Homestead other than those owned by Homestead or Security
Capital will be converted into the right to receive $4.10 per share in cash,
without interest.
At a meeting on May 2, 2000, your Board of Directors (the "Board"), by vote
of each member of the Board (other than two members who abstained because of
their positions with Security Capital) based on, among other things, the
recommendation of a Special Committee comprised of Homestead's independent
directors, (i) determined that each of the tender offer and the merger is fair
to, advisable and in the best interests of Homestead and its stockholders and
(ii) recommended acceptance of the tender offer and approval of the merger by
Homestead's stockholders.
In arriving at its recommendation, the Board gave careful consideration to
the factors described in the enclosed tender offer materials and Homestead's
Solicitation/Recommendation Statement on Schedule 14D-9. Included as Annex A
to the Schedule 14D-9 is the written opinion, dated May 2, 2000, of Xxxxx
Xxxxxxx & Co., the Special Committee's financial advisor, to the effect that,
as of that date and based on and subject to the matters described in the
opinion, the price per share of $4.10 to be received in the tender offer and
the merger by the holders of Homestead shares, is fair, from a financial point
of view, to those holders.
Enclosed for your consideration are copies of the tender offer materials and
Homestead's Solicitation/Recommendation Statement on Schedule 14D-9, which are
being filed today with the Securities and Exchange Commission. These documents
should be read carefully.
Sincerely,
/s/ X. Xxxxxx Xxxxxxxxxxx
X. Xxxxxx Xxxxxxxxxxx
Interim Chairman
