Early Warning Report filed under National Instrument 62-103
TORONTO, May 27 /CNW/ -
1. Name and address of the offeror
Homburg Invest Inc. ("Homburg Invest")
1741 Brunswick Street, Suite 600
Halifax, Nova Scotia B3J 3X8
2. The designation and number or principal amount of securities and the
offeror's securityholding percentage in the class of securities of
which the offeror acquired ownership or control in the transaction or
occurrence giving rise to the obligation to file the news release,
and whether it was ownership or control that was acquired in those
circumstances.
On May 25, 2010, in connection with the initial public offering of
Homburg Canada Real Estate Investment Trust (the "REIT") pursuant to
a final long form prospectus dated May 14, 2010 and the acquisition
by the REIT of a portfolio of Canadian income-producing commercial
properties and income-producing multi-family residential properties
from Homburg Canada Incorporated ("Homburg Canada") and Homburg
Invest (collectively, the "Transaction"), Homburg Invest acquired the
beneficial ownership of 15,291,206 trust units of the REIT ("REIT
Units"), representing 48.9% of the outstanding REIT Units.
3. The designation and number or principal amount of securities and the
offeror's securityholding percentage in the class of securities
immediately after the transaction or occurrence giving rise to the
obligation to file a news release.
Homburg Invest currently owns 15,291,206 REIT Units, representing
48.9% of the outstanding REIT Units.
4. The designation and number or principal amount of securities and the
percentage of outstanding securities of the class of securities
referred to in paragraph 3 over which:
(i) the offeror, either alone or together with joint actors, has
ownership and control,
Homburg Invest and Homburg Canada are both companies
indirectly controlled by Richard Homburg. Therefore, Homburg
Canada may be considered a joint actor of Homburg Invest.
In connection with the Transaction, Homburg Canada
acquired the beneficial ownership of 2,745,502 Class B
limited partnership units of Homburg Canada REIT Limited
Partnership ("Class B LP Units"), a subsidiary of the REIT.
One special voting unit of the REIT ("Special Voting Units")
was issued to Homburg Canada in tandem with each Class B LP
Unit. The 2,745,502 Special Voting Units and 2,745,502 Class
B LP Units acquired by Homburg Canada represent 100% of the
outstanding Special Voting Units and Class B LP Units,
respectively.
The Class B LP Units are economically equivalent to and
exchangeable for REIT Units. Each Class B LP Unit is
exchangeable into one REIT Unit (subject to customary
adjustments following corporate reorganizations). The
Special Voting Units issued in tandem with the Class B LP
Units provide the Class B LP Unit holder with the same
voting rights in the REIT as a REIT Unit.
Assuming the exchange of the Class B LP Units in full,
Homburg Invest and Homburg Canada have beneficial ownership
over approximately 53% of the REIT Units on such a diluted
basis.
(ii) the offeror, either alone or together with joint actors, has
ownership but control is held by other persons or companies
other than the offeror or any joint actor,
Not applicable.
(iii) the offeror, either alone or together with joint actors, has
exclusive or shared control but does not have ownership.
Not applicable.
5. The name of the market in which the transaction or occurrence that
gave rise to the news release took place.
Not applicable.
6. The value, in Canadian dollars, of any consideration offered per
security if the offeror acquired ownership of a security in the
transaction or occurrence giving rise to the obligation to file a
news release.
Homburg Invest acquired ownership of the 15,291,206 REIT Units for
$10 per REIT Unit. Homburg Canada acquired ownership of the 2,745,502
Class B LP Units for $10 per Class B LP Units.
7. The purpose of the offeror and any joint actors in effecting the
transaction or occurrence that gave rise to the news release,
including any future intention to acquire ownership of, or control
over, additional securities of the reporting issuer.
In connection with the Transaction, Homburg Invest retained a 44.9%
interest in the REIT through the ownership of 15,291,206 REIT Units
and Homburg Canada retained a 8.1% indirect interest in the REIT
through the ownership of 2,745,502 Class B LP Units, which are
economically equivalent to and exchangeable for REIT Units. Homburg
Invest and Homburg Canada have no current plan or proposal which
relates to, or would result in, acquiring additional ownership or
control over the securities of the REIT. Homburg Invest and Homburg
Canada may purchase or sell securities of the REIT in the future on
the open market or in private transactions.
In connection with the initial public offering of the REIT, the REIT
and Homburg Invest have granted to the underwriters an option (the
"Over-Allotment Option") to cover over-allotments, if any, and for
market stabilization purposes. The Over-Allotment Option may be
exercised by the underwriters, in whole or in part, for a 30-day
period following closing of the offering, which occurred on May 25,
2010, and entitles the underwriters to purchase up to an aggregate of
2,400,000 additional REIT Units, of which up to 960,000 REIT Units
are to be issued and sold by the REIT and up to 1,440,000 REIT Units
are to be sold by Homburg Invest.
8. The general nature and the material terms of any agreement, other
than lending arrangements, with respect to securities of the
reporting issuer, entered into by the offeror, or any joint actor,
and the issuer of the securities or any other entity in connection
with the transaction or occurrence giving rise to the news release,
including agreements with respect to the acquisition, holding,
disposition or voting of any securities.
Pursuant to an exchange agreement, each Class B LP Unit is
exchangeable into one REIT Unit (subject to customary adjustments
following corporate reorganizations) and, subject to certain
restrictions, Homburg Invest has been granted pre-emptive rights to
maintain its pro rata ownership interest in the REIT, as well as
demand and "piggy back" registration rights with respect to public
offerings by the REIT.
In addition, pursuant to the REIT's declaration of trust, Homburg
Invest has been granted the right to appoint a certain number of
trustees to the board of trustees of the REIT depending on the size
of the board of trustees and Homburg Invest's retained interest.
Pursuant to the underwriting agreement entered into in connection
with the initial public offering of the REIT, Homburg Invest, Homburg
Canada and Richard Homburg have agreed, subject to certain
exceptions, not to directly or indirectly sell, pledge, grant any
option to purchase, make any short sale or otherwise dispose of any
REIT Units, securities or other financial instruments convertible or
exchangeable into REIT Units until 180 days after closing of the
initial public offering, without first obtaining the written consent
of the underwriters.
9. The names of any joint actors in connection with the disclosure
required by this form.
See the response to Item 4(a) above.
10. In the case of a transaction or occurrence that did not take place on
a stock exchange or other market that represents a published market
for the securities, including an issuance from treasury, the nature
and value in Canadian dollars of the consideration paid by the
offeror.
See the response to Item 6 above.
11. If applicable, a description of any change in any material fact set
out in a previous report by the entity under the early warning
requirements or Part 4 of National Instrument 62-103 in respect of
the reporting issuer's securities.
Not applicable.
12. If applicable, a description of the exemption from securities
legislation being relied on by the offeror and the facts supporting
that reliance.
Not applicable.
For further information: Mr. Richard Homburg, Chairman and CEO, Homburg Invest Inc., Tel: (902) 468-3395
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