Loblaw Companies Limited Subsidiary Choice Properties Real Estate Investment Trust Completes $400 Million Initial Public Offering and $600 Million Senior Unsecured Debentures Offering
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BRAMPTON, ON, July 5, 2013 /CNW/ - Loblaw Companies Limited ("Loblaw" or the "Company") (TSX: "L") announced today that Choice Properties Real Estate Investment Trust ("Choice Properties" or the "REIT") (TSX: CHP.UN) has completed a $400 million initial public offering of trust units (the "Units"), as well as a concurrent offering of $600 million aggregate principal amount of senior unsecured debentures. Choice Properties also completed a $200 million offering of Units to George Weston Limited (Loblaw's majority shareholder). In connection with the closing of the initial public offering, Loblaw sold a portfolio of 425 properties (the "Portfolio of Properties") indirectly to Choice Properties for a total purchase price of approximately $7 billion.
As at closing, Loblaw held an approximate 83.1% effective interest in Choice Properties (or an approximate 81.7% effective interest if the over-allotment is exercised in full) on a fully diluted basis through ownership of 21,500,000 Units and all of the Class B limited partnership units of Choice Properties Limited Partnership (the "Partnership"), which are economically equivalent to and exchangeable for Units. In addition, Loblaw holds all of the outstanding Class C limited partnership units of the Partnership and has received $2.6 billion aggregate principal amount of promissory notes from the Partnership, of which $600 million was repaid on the closing date from the proceeds of the REIT offering of senior unsecured debentures.
The Portfolio of Properties represents approximately 35.3 million square feet of gross leasable area, comprising of 415 retail properties, one office complex and nine warehouse properties. The Portfolio of Properties represents approximately 75% of Loblaw's owned real estate square footage. At closing, Loblaw owned commercial properties comprising an aggregate of approximately 12 million square feet of gross leasable area. Loblaw has advised the REIT that its current intention, subject to market conditions, is to offer to sell to the REIT the significant majority of its remaining owned property over the next 10 years.
Loblaw will be the REIT's most significant tenant for the foreseeable future. At closing, Loblaw represented approximately 91.2% of the REIT's annual base minimum rent and 88.3% of the REIT's gross leasable area.
About Loblaw Companies Limited
Loblaw Companies Limited, a subsidiary of George Weston Limited, is Canada's largest food retailer and a leading provider of drugstore, general merchandise and financial products and services. Loblaw is one of the largest private sector employers in Canada. With more than 1,000 corporate and franchised stores from coast to coast, Loblaw and its franchisees employ approximately 134,000 full-time and part-time employees. Through its portfolio of store formats, Loblaw is committed to providing Canadians with a wide, growing and successful range of products and services to meet the everyday household demands of Canadian consumers. Loblaw is known for the quality, innovation and value of its food offering. It offers Canada's strongest control (private) label program, including the unique President's Choice®, no name® and Joe Fresh® brands. In addition, the Company makes available to consumers President's Choice® financial services and offers the PC® points and PC Plus™ loyalty program. For more information, visit Loblaw's website at www.loblaw.ca and Loblaw's issuer profile at www.sedar.com.
Forward -Looking Statements
This press release may contain forward-looking information within the meaning of applicable securities legislation, which reflects Loblaw's current expectations regarding future events. 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 Loblaw'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, changes in economic and market conditions, and other risks and uncertainties discussed in the Company's materials filed with the Canadian securities regulatory authorities from time to time, including the Enterprise Risks and Risk Management section of the Management's Discussion and Analysis ("MD&A") and the MD&A included in the Company's 2012 Annual Report - Financial Review. Loblaw 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.
SOURCE: Loblaw Companies LimitedFor further information:
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