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Slate Retail REIT Announces Intention to Commence Substantial Issuer Bid

January 10, 2019

TORONTO--(BUSINESS WIRE)--Jan 9, 2019--Slate Retail REIT (TSX:SRT.U) (TSX:SRT.UN) (the “REIT”), an owner and operator of U.S. grocery-anchored real estate, announced today its intention to commence a substantial issuer bid (the “Offer”) pursuant to which the REIT will offer to purchase up to 4,210,526 Class U units, (the “Class U Units”) at a purchase price per Class U Unit of C$12.54 (the “Purchase Price”).

The REIT and the Board of Trustees believe that the recent trading price of the Class U Units is not reflective of the underlying value of the REIT or its long-term growth prospects. The Offer provides the REIT with an opportunity to return up to approximately C$52.8 million of capital to unitholders who have their Class U Units taken up and paid for pursuant to the Offer while simultaneously increasing the proportionate ownership of unitholders who did not have their Class U Units taken up and paid for pursuant to the Offer. As a result, the Board of Trustees believes that the purchase of the Class U Units under the Offer represents an advisable use of the REIT’s financial resources and is in the best interest of the REIT. The REIT’s trustees and officers have advised that they do not intend to tender any Class U Units held by them pursuant to the Offer.

The Purchase Price represents a 7.5% premium over the 20-day volume-weighted average price of the Class U Units on the Toronto Stock Exchange on January 9, 2019, the last full trading day prior to this announcement.

Details of the Offer, including instructions for tendering Class U Units to the Offer and the factors considered by the Board of Trustees in making its decision to approve the Offer, will be included in the formal offer to purchase and issuer bid circular and other related documents (the “Offer Documents”), which are expected to be mailed to unitholders, filed with applicable Canadian Securities Administrators and made available free of charge on or about January 16, 2019 on SEDAR at www.sedar.com. Unitholders should carefully read the Offer Documents prior to making a decision with respect to the Offer. The Offer will not be conditional on any minimum number of Class U Units being tendered, but will be subject to various other conditions that are typical for a transaction of this nature.

The Offer will commence on January 16, 2019 and expire at 5:00 p.m. (Eastern time) on February 20, 2019 (the “Expiration Time”), unless extended, terminated or withdrawn by the REIT. If more than 4,210,526 Class U Units are validly tendered for purchase, the tendered Class U Units will be purchased on a pro rata basis according to the number of Class U Units validly tendered, except that tenders by holders of “odd lots” (unitholding of fewer than 100 Class U Units) will not be subject to proration.

The Purchase Price is denominated in Canadian dollars, and amounts payable for Class U Units accepted for purchase will be paid, in Canadian dollars. Unitholders may elect to have TSX Trust Company (the “Depositary”) convert any amounts payable to them from Canadian dollars into U.S. dollars by checking the appropriate box in the Letter of Transmittal, in which case such Unitholder will have acknowledged and agreed that the exchange rate for one Canadian dollar expressed in U.S. dollars will be based on the exchange rate available to the Depositary at its typical banking institution on the date the funds are converted. Unitholders electing to have the payment for their Class U Units paid in U.S. dollars will have further acknowledged and agreed that any change to the currency exchange rate of the Canadian and U.S. dollars prior to conversion will be at the sole risk of the Unitholder.

Assuming that 4,210,526 Class U Units are purchased pursuant to the Offer, the aggregate purchase price pursuant to the Offer will be C$52.8 million. The REIT has adequate cash on hand and availability under the existing credit facilities to fund the Offer. Furthermore, during the twelve-month period ended December 31, 2018, the REIT disposed of 13 property outparcels and two properties for $55.1 million. In addition, the REIT has identified a pipeline of stabilized properties totaling approximately $100 million that will be targeted for sale in order to recycle capital into more accretive opportunities, including repurchasing units for cancellation under the Offer, and to reduce financial leverage.

The Board of Trustees of the REIT has voluntarily obtained an opinion from GMP Securities L.P., to the effect that, based on and subject to the qualifications, assumptions and limitations stated in such opinion, a liquid market exists for the Class U Units as of January 9, 2019, and that it is reasonable to conclude that, on completion of the Offer in accordance with its terms, there will be a market for the holders of Class U Units who do not tender their Class U Units to the Offer that is not materially less liquid than at the time of making the Offer. A copy of the opinion of GMP Securities L.P. will be included in the issuer bid circular.

The Board of Trustees of the REIT has approved the Offer. However, the Board of Trustees and GMP Securities L.P., the dealer manager for the Offer (the “Dealer Manager”), are not making any recommendation to any Unitholder as to whether to tender or refrain from tendering any or all of such Unitholder’s Class U Units pursuant to the Offer. Unitholders are urged to evaluate carefully all information in the Offer to Purchase and Circular, consult their own investment and tax advisors and make their own decisions as to whether to tender Class U Units to the Offer and, if so, how many Class U Units to tender, if any.

The REIT will suspend further purchases of Class U Units pursuant to the existing normal course issuer bid until after the Expiration Time or the date of termination of the Offer.

Any questions or requests for information regarding the Offer should be directed to the Depositary at: 1-866-600-5869 (Toll Free), or the Dealer Manager at: slateSIB@gmpsecurities.com.

Forward Looking Statements Certain information herein constitutes “forward-looking statements” within the meaning of applicable securities legislation. These statements reflect management’s expectations and include, but are not limited to: statements with respect to management’s beliefs, plans, estimates and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts; our intention to undertake a substantial issuer bid (the Offer) and the terms thereof, including the maximum number of Class U Units we may purchase under the Offer; the timing for completion of the Offer; the sources and availability of funding for the Offer; the market for the Class U Units after completion of the Offer not being materially less liquid than the market that exists at the time of the making of the Offer; future purchases of additional Class U Units following the expiry of the Offer; and our belief that the Offer is a prudent use of the REIT’s financial resources. Statements that contain words such as “could”, “should”, “would”, “can”, “anticipate”, “expect”, “does not expect”, “believe”, “plan”, budget”, “schedule”, “estimate”, “intend”, “project”, “will”, “may”, “might”, “continue” and similar expressions or statements relating to matters that are not historical facts constitute forward-looking statements.

These forward-looking statements are not guarantees of future events or performance and, by their nature, are based on the REIT’s current estimates and assumptions, which are subject to significant risks and uncertainties. The REIT believes that these statements are made based on reasonable assumptions; however, there is no assurance that the events or circumstances reflected in these forward-looking statements will occur or be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements including, but not limited to the risks that are more fully discussed under the “Risk Factors” section of the annual information form of the REIT for the year ended December 31, 2017. Factors that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include, but are not limited to risks related to: price and other competitive factors generally affecting our industry; managing our operations during uncertain market and economic conditions; responding to changes in demand, the Offer not occurring as expected, including failure to satisfy any condition to the Offer; our inability to finance the Offer in the manner we intend (including due to any failure to have available cash on hand, use of our credit facilities and/or other capital resources to fund the Offer); the extent to which unitholders elect to tender their Class U Units under the Offer; our having sufficient financial resources and working capital following completion of the Offer (including to fund our currently anticipated financial obligations and pursue desirable business opportunities); the market for the Class U Units at the completion of the Offer being materially less liquid than the market that exists at the time we commence it; and the Offer being completed later than the first quarter of 2019.

About Slate Retail REIT (TSX: SRT.U / SRT.UN) Slate Retail REIT is a real estate investment trust focused on U.S. grocery-anchored real estate. The REIT owns and operates approximately U.S. $1.5 billion of assets located across the top 50 U.S. metro markets that are visited regularly by consumers for their everyday needs. The REIT’s conservative payout ratio, together with its diversified portfolio and quality tenant covenants, provides a strong basis to continue to grow unitholder distributions and the flexibility to capitalize on opportunities that drive value appreciation. Visit  slateretailreit.com to learn more about the REIT.

About Slate Asset Management L.P. Slate Asset Management L.P. is a leading real estate investment platform with over $6 billion in assets under management. Slate is a value-oriented manager and a significant sponsor of all of its private and publicly-traded investment vehicles, which are tailored to the unique goals and objectives of its investors. The firm’s careful and selective investment approach creates long-term value with an emphasis on capital preservation and outsized returns. Slate is supported by exceptional people, flexible capital and a proven ability to originate and execute on a wide range of compelling investment opportunities. Visit  slateam.com  to learn more.

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CONTACT: Investor Relations

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SOURCE: Slate Retail REIT

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PUB: 01/09/2019 07:01 PM/DISC: 01/09/2019 07:01 PM


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