Offer price of $26.00 per unit of Primaris Retail REIT.
Offer price represents a premium of approximately 13.3% to the
volume-weighted average trading price of Primaris' units on the TSX
over the 20 trading days ended December 4, 2012, and a premium
valuation for all of Primaris' portfolio of properties.
All-cash consideration provides Primaris' unitholders with certainty of
value and immediate liquidity.
KingSett Capital's consortium consists of certain KingSett Capital funds
and Ontario Pension Board, and is supported by an agreement with RioCan
to purchase certain Primaris assets following completion of the Offer.
This group of leading Canadian institutional real estate investors is
fully committed to working together to complete the transaction.
The consortium also has the full support of significant investors in
KingSett Capital funds, including Alberta Investment Management Corp.
and Ivanhoé Cambridge.
TORONTO, Dec. 5, 2012 /CNW/ - A KingSett Capital led consortium that
includes Ontario Pension Board today announced its intention to make an
all-cash offer to purchase all of the issued and outstanding trust
units (the "Units") of Primaris Retail Real Estate Investment Trust
("Primaris") at a price of $26.00 in cash per Unit (the "Offer"). The
total transaction is valued at $4.4 billion.
The Offer price represents a premium of approximately 12.8% to the
closing price of $23.04 per Unit on the TSX on December 4, 2012 and a
premium of approximately 13.3% to the volume weighted average trading
price of $22.95 per Unit over the 20 trading days on the TSX up to and
including December 4, 2012.
The Offer price, which is above the all-time highest historical trading
price of Primaris Units on the TSX prior to this announcement,
represents a premium valuation that fully reflects the composition of
Primaris' property portfolio.
Commenting on the Offer, KingSett Capital Managing Partner, Mr. Jon
Love, said "This is a strong and compelling offer, providing
unitholders with a premium price at a time of peak valuations in the
sector. The all-cash offer provides Primaris' unitholders with an
attractive opportunity to obtain immediate liquidity in the face of
economic uncertainty and volatile markets. We firmly believe that this
offer will be very appealing to unitholders."
Ontario Pension Board Chief Executive Officer, Mr. Mark Fuller, added
"This transaction provides significant and immediate value to Primaris'
unitholders and is fully aligned with our strategy to increase our
exposure to private market investments, such as real estate, private
equity, and infrastructure, by partnering with leading institutions."
The Offeror and its Supporters
The Offer will be made by KS Acquisition II LP (the "Offeror"), a
limited partnership owned equally by a subsidiary of KingSett Real
Estate Growth LP No.5 ("KingSett LP 5"), an affiliate of KingSett
Capital, and OPB Finance Trust II ("OPB Trust"), an affiliate of
Ontario Pension Board. The Offeror and its affiliates own 6,880,000
trust units of Primaris, representing approximately 7% of Primaris'
currently issued and outstanding trust units, making them one of the
largest unitholders based on publicly available information.
In connection with the transaction, RioCan Real Estate Investment Trust
("RioCan"), has agreed to purchase certain Primaris properties from the
Offeror upon completion of the transaction for an aggregate purchase
price of approximately $1.1 billion. RioCan, Canada's largest real
estate investment trust with a total capitalization of approximately
$13.9 billion as at September 30, 2012, owns and manages Canada's
largest portfolio of shopping centres.
In addition to RioCan, other supporters of the transaction, in their
roles as limited partners of certain KingSett Capital funds, include
Alberta Investment Management Corp. ("AIMCo"), Ivanhoé Cambridge, and a
number of other leading Canadian institutional real estate investors.
AIMCo is one of Canada's largest and most diversified institutional
investment fund managers, with an investment portfolio of approximately
$70 billion. Ivanhoé Cambridge, with assets of more than $30 billion,
is one of the world's 10 largest real estate companies and one of
Canada's largest owners of shopping centres.
The KingSett Capital led consortium and its supporters represent some of
Canada's most prominent institutional real estate investors and
landlords, who possess a thorough understanding of the Canadian retail
real estate market. They have a proven track record for completing
major real estate transactions and are fully committed to completing
Additional Details of the Offer
Full details of the Offer will be included in the formal offer and
take-over bid circular which will be publicly filed with Canadian
securities regulatory authorities in the coming days and subsequently
mailed to unitholders.
The Offer will be subject to certain conditions including, without
limitation, that the number of Units tendered under the Offer, together
with Units owned by the Offeror or its affiliates upon expiry of the
Offer, constitute at least 66⅔% of the Units then outstanding
(calculated on a fully-diluted basis). The Offer will also be
conditional upon the Primaris unitholder rights plan being terminated
or determined to be ineffective, receipt of all regulatory approvals,
no material adverse change in Primaris and other conditions customary
for transactions of this nature.
The Offeror has secured, on a firm, committed basis, all of the
financing required to complete the transaction and to provide for any
post-closing refinancing and on-going liquidity requirements. Funding
for the Offer will be provided by KingSett LP 5, OPB Trust, fully
underwritten debt financing commitments from The Toronto-Dominion Bank
and firm contracted asset sales to RioCan and various partnerships
involving Ontario Pension Board entities and KingSett Capital funds.
The Offer is fully financed and not subject to any financing condition.
The Offeror has engaged TD Securities Inc. as financial advisor. Its
legal advisors are Osler, Hoskin & Harcourt LLP and Bennett Jones LLP.
About KingSett Capital
KingSett Capital is Canada's leading private equity real estate
investment business, co-investing with pension fund and high net worth
individual clients. KingSett Capital invests through a series of growth
funds, mortgage funds and a core investment income fund, each with its
own risk/return strategy. KingSett Capital has executed transactions
valued at over $12.5 billion in the past 10 years.
About Ontario Pension Board
Ontario Pension Board administers Ontario's Public Service Pension Plan,
a defined benefit pension plan serving more than 42,000 members and
their employers as well as more than 40,000 pensioners and deferred
members. With more than $17 billion in assets, it is one of Canada's
largest pension plans. Over the last 20 years, Ontario Pension Board
has become one of Canada's leading direct owners of high
quality shopping centres.
This announcement is for informational purposes only and does not
constitute or form part of any offer or invitation to purchase,
otherwise acquire, subscribe for, sell, otherwise dispose of or issue,
or any solicitation of any offer to sell, otherwise dispose of, issue,
purchase, otherwise acquire or subscribe for, any security. The
release, publication and distribution of this announcement in certain
jurisdictions may be restricted by law and therefore persons in such
jurisdictions into which this announcement is released, published and
distributed should inform themselves about and observe such
restrictions. The Offer is not being made in, nor will deposits of
securities be accepted in, any jurisdiction in which the making or
acceptance thereof would not be in compliance with the laws of such
jurisdiction. However, the Offeror may, in its sole discretion, take
such action as it deems necessary to extend the Offer in any such
Certain information contained in this news release constitutes
"forward-looking information" (or "forward-looking statements") within
the meaning of applicable securities laws. All statements, other than
statements of historical or present fact, constitute forward-looking
information and typically include words and phrases about the future
such as "may", "will", "anticipate", "estimate", "anticipate",
"expect", "plan", "intend", "believe", "predict", "goal", "target",
"project", "potential", "strategy" and "outlook" or the negative
thereof or similar variations. Forward-looking information is
necessarily based upon a number of assumptions that, while considered
reasonable by each of KingSett Capital and Ontario Pension Board, are
inherently subject to significant business, economic and competitive
uncertainties and contingencies. KingSett Capital and Ontario Pension
Board caution the reader that such forward-looking information involves
known and unknown risks, uncertainties and other factors, estimates and
assumptions that may cause actual results and developments to differ
materially from those expressed or implied by such forward-looking
information. Some important factors, estimates and assumptions that
could cause actual results to differ materially from expectations
include, among other things, the assumption that KingSett Capital and
Ontario Pension board will acquire a 100% interest in Primaris through
the Offer; the assumption that all of the conditions to the Offer will
be satisfied; certain assumptions relating to general economic
conditions, market factors, competition, changes in government
regulation and changes in prevailing interest rates; and the assumption
that there are no inaccuracies or material omissions in Primaris'
publicly available information, and that Primaris has not disclosed
events which may have occurred or which may affect the significance or
accuracy of such information. While KingSett Capital and Ontario
Pension Board consider these factors, estimates and assumptions to be
reasonable based on information currently available to them, they may
prove to be inaccurate.
The information concerning Primaris contained in this press release has
been taken from or is based entirely upon Primaris' publicly available
documents and has not been independently verified by KingSett Capital
or Ontario Pension Board. Neither KingSett Capital, Ontario Pension
Board, nor any of their respective directors or officers assumes any
responsibility for the accuracy or completeness of such information,
or for any failure by Primaris to disclose events or facts which may
have occurred or which may affect the significance or accuracy of any
such information, but which are unknown to KingSett Capital and Ontario
Pension Board. Forward-looking information contained herein are made as
of the date of this press release based on the opinions and estimates
of each of KingSett Capital and Ontario Pension Board on the date
statements containing such forward-looking information are made.
KingSett Capital and Ontario Pension Board do not undertake any
obligation to update or revise forward-looking information, whether as
a result of new information, future events or otherwise, except to the
extent legally required. Accordingly, readers should not place any
undue reliance on forward-looking information.
SOURCE: KingSett Capital
For further information:
Tel: (604) 644-6090