Exhibit 1
March 23, 2000
Board of Directors
Homestead Village Incorporated
0000 XxxxxXxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Gentlemen:
This letter will serve to set forth in writing the general outline of the
transaction we are proposing (the "Proposed Transaction") between Security
Capital Group Incorporated ("Security Capital") and Homestead Village
Incorporated ("Homestead").
The Proposed Transaction would involve a tender offer by a newly-formed
subsidiary of Security Capital for all of the outstanding shares of
Homestead common stock not owned by Security Capital. Homestead shareholders
would receive cash of $3.40 for each common share of Homestead. We believe that
our proposal is at a fair price that reflects Homestead's historical results and
future prospects and that consummation of our proposed transaction would be in
the best interest of Homestead and its public stockholders.
Promptly following consummation of the tender offer, the remaining shares
of Homestead common stock would be acquired at the same price as a result of a
merger between Homestead and a subsidiary of Security Capital.
The Proposed Transaction would be effected pursuant to a merger agreement
in form and substance customary for transactions of this sort. The agreement
would be entered into only following approval and recommendation by the
independent members of the Homestead Board of Directors, who we would expect to
serve as a Special Committee of the Board in connection with the consideration
of the Proposed Transaction, and only upon receipt by Homestead of an opinion
from the Special Committee's independent financial advisor as to the fairness
from a financial point of view of the Proposed Transaction to the shareholders
of Homestead unaffiliated with Security Capital.
We reserve the right to amend or withdraw the proposal at any time at our
sole discretion.
The Proposed Transaction is not subject to any financing contingency.
March 23, 2000
Page Two
As you know, we and our financial and legal advisors (Chase Securities
Inc. and Xxxxxxxx, Lipton, Xxxxx & Xxxx) are prepared to meet with the Special
Committee and its legal and financial advisors at your convenience to review the
Proposed Transaction and anything else that may be of interest or assistance.
This proposal will be filed as part of an amendment to Security Capital's
Schedule 13D with respect to the ownership of Homestead's stock.
Sincerely,
SECURITY CAPITAL GROUP
INCORPORATED
Xxxxxxx X. Xxxxxxx
Chairman
