Minto Apartment REIT Announces Unitholder Approval in Connection with Acquisition of High Park Village
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OTTAWA, July 24, 2019 /CNW/ - Minto Apartment Real Estate Investment Trust (TSX: MI.UN) (the "REIT") today announced that, in connection with its previously announced acquisition of a 40% interest in the High Park Village apartment complex in Toronto (the "Acquisition") from Minto Properties Inc. ("MPI"), it has obtained consents from disinterested unitholders of the REIT holding, in the aggregate, more than 50% of the REIT's issued and outstanding units (excluding voting interests held by MPI) approving the Acquisition.
The aggregate purchase price for the Acquisition of approximately $131.2 million will be satisfied by:
- The assumption of 40% of an existing approximately $98.7 million mortgage term loan that matures April 1, 2026 and bears interest of 3.375%;
- The issuance of $55 million (2,806,122) in Class B limited partner units of Minto Apartment Limited Partnership to MPI, at a price of $19.60 per Class B limited partner unit, representing a premium of 1.3% based on the 5-day volume weighted average price of REIT units on July 15, 2019, the date the Acquisition was originally announced. Class B limited partner units are exchangeable for units of the REIT on a one-for-one basis and also include the issuance of one special voting unit of the REIT for each Class B limited partner unit that is issued; and
- The REIT's existing revolving credit facility.
Please refer to the press release of the REIT dated July 15, 2019 for additional information concerning the Acquisition.
Immediately prior to entering into the Acquisition, MPI held an aggregate approximately 45.8% indirect interest in the REIT (including all exchangeable Class B limited partner units) and will hold an aggregate approximately 49% indirect ownership interest in the REIT on completion of the Acquisition. MPI is therefore an "insider" of the REIT as defined in the TSX Company Manual. Pursuant to section 604 of the TSX Company Manual, the Acquisition is subject to approval by unitholders holding a majority of the REIT's units, excluding MPI and its affiliates and associates, because the total consideration to be received by MPI from the Acquisition, which includes an issuance of securities exchangeable for REIT units, is equal to 14.8% of the REIT's market capitalization as at July 15, 2019 (including all exchangeable Class B limited partner units), which exceeds 10% of the REIT's market capitalization.
The REIT has obtained written consents from disinterested unitholders holding, in the aggregate, more than 50% of the REIT's units (excluding voting interest held by MPI and its affiliates and associates) in respect of the Acquisition. The REIT has relied on the exemption in section 604(d) of the TSX Company Manual to obtain unitholder approval by way of written consents from disinterested holders of more than 50% of the REIT's units, rather than at a meeting of unitholders. Closing will occur following TSX approval, compliance with the requirements of the Competition Act and the satisfaction of other customary closing conditions. In accordance with the TSX Company Manual, the closing of the Acquisition will be effected no earlier than August 1, 2019.
The Acquisition, including the issuance of the Class B limited partner units to MPI as partial consideration for it, will not materially affect control of the REIT as MPI already owns or controls greater than 20% of the outstanding units of the REIT.
About Minto Apartment Real Estate Investment Trust
Minto Apartment Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario to own income-producing multi-residential properties located in urban markets in Canada. The REIT owns a portfolio of high-quality income-producing multi-residential rental properties located in Toronto, Montreal, Ottawa, Calgary and Edmonton. For more information on Minto Apartment REIT, please visit the REIT's website at: www.mintoapartments.com/.
This news release may contain forward-looking information within the meaning of applicable securities legislation, which reflects the REIT's current expectations regarding future events and in some cases can be identified by such terms as "will" and "expected". Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the REIT's control that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the factors discussed under "Risk Factors" in the REIT's Management Discussion & Analysis and Annual Information Form, each dated March 19, 2019, which are available on SEDAR (www.sedar.com), as well as the ability of the REIT to complete the proposed Acquisition, including the assumed mortgage financing contemplated therein. Certain information in this press release may be considered as "financial outlook" within the meaning of applicable securities legislation. The purpose of this financial outlook is to provide readers with disclosure regarding the REIT's reasonable expectations with respect to the proposed Acquisition. Readers are cautioned that the financial outlook may not be appropriate for other purposes. The REIT does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law. This forward-looking information speaks only as of the date of this news release.
SOURCE Minto Apartment Real Estate Investment Trust