TORONTO, Nov. 15, 2013 /CNW/ - Orange Capital, LLC ("Orange") announced on November 14, 2013 that it submitted an offer letter to
League Assets Corp. ("League") and PricewaterhouseCoopers (the court appointed "Monitor"), to purchase the 3,872,863 units of Partners REIT owned by IGW Public
LP, a subsidiary of League. In addition, Orange has also offered to
purchase League's right, title and interest in the Partners REIT
Management Agreement (collectively, the "Offer").
Highlights of Orange's Offer include:
$6.00 all-cash purchase price, a 10% premium to Partners REIT current
Upfront payment of the termination fee owed to League under the Partners
REIT management agreement on March 31, 2014
Intention to offer employment to League's dedicated Partners REIT
Aggregate proceeds of approximately $27 million to the League estate
"We believe our Offer is an attractive one, as it provides immediate
substantial liquidity to the League estate and significantly improves
the probability of a successful restructuring. Orange is in a position
to transact quickly as our Offer is subject only to customary closing
conditions", commented Daniel Lewis, Orange's Managing Partner.
Orange's Offer provides significant benefits to League's stakeholders,
Removes all uncertainty surrounding the value of the Partners REIT units
Eliminates the risk to League from any adverse outcome of the strategic
review process by the independent trustees of Partners REIT as advised
by National Bank of Canada
Provides for 100% cash consideration not subject to financing
Eliminates the need for League to obtain substantial, and expensive, DIP
Addresses concerns by certain League creditors that have the Partners
REIT units pledged as collateral
Partners REIT is a highly-levered public company that had been
significantly over-distributing relative to its actual adjusted funds
from operations. The unit price is down over 30% year to date and
there are numerous factors that are likely to further erode the value
of League's interest in Partners REIT. Last evening, Partners REIT
announced that the distribution would be reduced by approximately
22%. In addition, given Partners REIT excessive financial leverage,
unitholders, including League, are likely to be diluted by the issuance
of new Partners REIT units. Finally, League, as manager of Partners
REIT, is in a highly complex CCAA proceeding that is likely to have a
continued negative effect on the equity value of Partners REIT. In
light of all these factors we feel that our all-cash Offer is
Partners REIT is engaged in a strategic review process that is highly
unlikely to yield an en-bloc offer at an all-cash premium given the
REIT's over-levered structure, the current state of the REIT market,
concern over liquidity of secondary market real estate, the recent
distribution cut and the aggressive existing valuation at the current
unit price. We understand that given this risk, Partners REIT is
seeking other "strategic proposals" including vend-in transactions,
combination transactions, strategic alliances, new equity issues and
recapitalizations, none of which would offer liquidity to the League
Orange has informed both the Monitor and League that it is open to
discussing its Offer in detail in order to come to an agreement quickly
for the benefit of the League estate and the secured creditors.
Orange has engaged Trimaven Capital Advisors Inc. as its financial
advisor and Norton Rose Fulbright Canada LLP as its legal advisor in
connection with the Offer.
About Orange Capital LLC
Orange Capital, LLC is a New York based investment firm. The firm is a
value oriented investor in event-driven securities. The firm allocates
across the capital structure on an opportunistic basis. Orange Capital
was co-founded in 2005 by Daniel Lewis and Russell Hoffman. Prior to
founding the firm, Orange Capital's portfolio manager, Daniel Lewis,
was a director with Citigroup's Global Special Situations Group.
About Trimaven Capital Advisors Inc.
Trimaven Capital Inc. ("Trimaven") is an independently owned real estate investment bank based in
Toronto. Trimaven offers clients highly specialized advice in mergers
and acquisitions, including hostile and special situations, corporate
finance, private equity and real estate asset advisory. Trimaven's
clients include public, private and corporate owners of real estate as
well as investment management firms and hedge funds. With a reputation
and expertise built over 40 years of experience as owners, managers and
advisors, Trimaven is known for its deep industry knowledge, quality
advice, and transaction execution capabilities. Trimaven's principals
are accomplished advisors with significant transactional experience.
Prior to forming Trimaven, the principals advised on over $30 billion
of transactions during their tenures at other top-tier firms.
SOURCE: Orange Capital, LLC
For further information:
Orange Capital, LLC
Trimaven Capital Advisors Inc.
Bayfield Strategy, Inc.