- Shareholders to receive CAD$12.00 per share in cash
- The transaction represents a premium of 27.1% to yesterday's closing price of the common shares on the TSX
- Arrangement Agreement has been unanimously approved by Regal's Board of Directors and Special Committee
- All directors and executive officers of Regal, representing in aggregate approximately 11.6% of Regal's outstanding common shares, have agreed to vote their shares in support of the transaction
- Regular dividends will continue until the closing date
- Closing is expected in the second half of 2015
TORONTO, June 18, 2015 /CNW/ - Regal Lifestyle Communities Inc. ("Regal") (TSX:RLC) announced today that it has entered into an arrangement agreement (the "Arrangement Agreement") pursuant to which Revera Inc. ("Revera") and Health Care REIT, Inc. ("HCN") will, through a joint investment vehicle (the "Purchaser"), acquire all of the outstanding common shares of Regal for CAD$12.00 per share in cash. The price of CAD$12.00 per share represents a premium of approximately 27.1% to the closing price of Regal's common shares on the Toronto Stock Exchange (the "TSX") on June 17, 2015 and a premium of approximately 25.8% to the 20-day volume weighted average price of Regal's common shares on the TSX as of June 17, 2015. The transaction implies a capitalization rate of approximately 6.1% on Regal's portfolio of retirement homes.
The transaction will be funded with existing and available liquidity from Revera and HCN and accordingly it is not subject to any financing condition.
Mr. Simon Nyilassy, President and CEO of Regal said, "We are pleased that, through their attractive offer to our shareholders, Revera and HCN have recognized the tremendous value that the Regal team has created since the company's IPO in October, 2012 through our focused efforts in building an exceptional portfolio of retirement homes and our dedication to fulfilling on our Vision and Values." He added, "We look forward to working with Revera and HCN to obtain all necessary approvals and ensure a smooth transition for our residents and employees."
"Revera is entering an exciting period of expansion in the senior living sector focused on growth and innovation across its private pay portfolio in Canada, the United States and the United Kingdom," said Thomas G. Wellner, President and Chief Executive Officer of Revera. "We are pleased to strengthen our relationship with HCN and to grow our leadership position in Canada through the acquisition of these high quality retirement communities. We look forward to welcoming the Regal team to Revera and to working together to continue creating great experiences for seniors in our communities."
The transaction, which will be completed by way of a plan of arrangement (the "Arrangement") under the Business Corporations Act (Ontario), is subject to certain customary closing conditions, including approval by Regal's shareholders, court approval and certain regulatory approvals in Canada. The Arrangement Agreement also includes non-solicitation and right to match provisions and provides for the payment of a termination fee of $16.5 million to the Purchaser in certain circumstances. Under the Arrangement Agreement, Regal is permitted to continue to pay its current monthly cash dividend consistent with its current practice until the closing. The transaction is expected to close in the second half of 2015.
The board of directors of Regal, after consultation with its financial and legal advisors, and on the unanimous recommendation of a Special Committee of Regal's board of directors (the "Special Committee"), has resolved to unanimously recommend that Regal shareholders vote in favour of the Arrangement. Regal's board of directors and the Special Committee have received a fairness opinion from CIBC, to the effect that, as of the date of such opinion and subject to the assumptions, limitations and qualifications set forth therein, the consideration to be received by Regal's shareholders pursuant to the Arrangement Agreement is fair, from a financial point of view, to Regal's shareholders.
The directors and executive officers of Regal, who in the aggregate beneficially own approximately 11.6% of the outstanding common shares of Regal, have agreed pursuant to voting and support agreements to vote their common shares in favour of the Arrangement unless the Arrangement Agreement is terminated. In addition, Revera currently owns approximately 8% of the outstanding shares of Regal.
The terms and conditions of the Arrangement will be disclosed in further detail in an information circular to be mailed to Regal shareholders in advance of the shareholder meeting to approve the Arrangement. A copy of the Arrangement Agreement, the information circular, the form of voting agreement and related documents will be filed with the Canadian securities regulatory authorities and will be available under Regal's profile at www.sedar.com.
Holders of Regal's 6.0% convertible unsecured subordinated debentures (the "Debentures") may convert their Debentures into Regal common shares in order that such holders of common shares may receive the consideration per common share under the Arrangement. In addition, we understand that the Purchaser will request that Regal call a meeting of the holders of the Debentures (the "Debentureholders") at which the Debentureholders will be asked to approve certain amendments (the "Amendments") to the trust indenture governing the terms of the Debentures. If approved by the requisite vote of the Debentureholders, the Amendments will require Regal to redeem the Debentures for cash, at a redemption price of 129.5% of the aggregate principal amount thereof, plus accrued interest, at any time on, or within 30 days of, the closing date of the Arrangement. The Arrangement Agreement is not conditional on the redemption of the Debentures. The Purchaser intends to retain BMO Capital Markets as soliciting dealer manager to form and manage a soliciting dealer group to solicit proxies from Debentureholders to vote in favour of the Amendments. Further details of the Amendments and the meeting of Debentureholders to approve the Amendments will be included in an information circular to be mailed to Debentureholders in advance of the Debentureholders' meeting, a copy of which will be filed with the Canadian securities regulatory authorities and will be available under Regal's profile at www.sedar.com.
In accordance with the Arrangement Agreement, Regal intends to suspend its dividend reinvestment plan (the "DRIP") and will provide the requisite notice to the plan agent and DRIP participants in due course.
Stikeman Elliott LLP is acting as legal counsel to Regal. CIBC is acting as financial advisor to Regal.
Goodmans LLP is acting as legal counsel to HCN and Revera. Brookfield Financial and BMO Capital Markets are acting as financial advisors to HCN and Revera.
Regal Lifestyle Communities Inc. is a corporation incorporated under the laws of the Province of Ontario which owns a portfolio of retirement communities offering a continuum of care from independent serviced living to a full range of assisted living programs. Regal's portfolio is comprised of 23 private pay retirement communities, consisting of over 3,600 suites, primarily located in the Province of Ontario and including communities located in each of the Provinces of British Columbia, Saskatchewan, Quebec and Newfoundland and Labrador.
This press release contains forward-looking information within the meaning of applicable securities laws that reflects the current expectations, estimates and projections of management about the future results, performance, achievements, prospects or opportunities for the companies following the transaction and expectations regarding whether a transaction will be consummated, including whether conditions to the consummation of the transaction will be satisfied, or the timing for completing the transaction. The words "may", "would", "could", "should", "will", "anticipate", "believe", "plan", "expect", "intend", "estimate", "aim", "endeavour", "project", "continue", "predict", "potential", or the negative of these terms or other similar expressions have been used to identify these forward-looking statements.
Forward-looking statements are based upon a number of assumptions and are subject to a number of known and unknown risks and uncertainties, many of which are beyond management's control, and that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking statements. Management has attempted to identify important factors that could cause actual results, performance or achievements to vary from current expectations or estimates, expressed or implied, by the forward-looking information. However, there may be other factors that cause results, performance or achievements not to be as expected or estimated and that could cause actual results, performance or achievements to differ materially from current expectations. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those expected or estimated in such statements. Accordingly, readers should not place undue reliance on forward-looking information.
The following factors could cause actual results to differ materially from those discussed in the forward-looking information: failure to satisfy the conditions to completion of the Arrangement, including approval by Regal's shareholders, court approval and certain regulatory approvals in Canada; the occurrence of any event, change or other circumstance that could give rise to the termination of the Arrangement Agreement; retention of employees, tenants, suppliers and other personnel being adversely affected by uncertainty surrounding the Arrangement; and the inability to successfully integrate the operations of the companies following completion of the transaction. Additional risks and uncertainties regarding Regal are described in its most recent Annual Information Form which is available on SEDAR at www.sedar.com.
This forward-looking information represents our views as of the date of this press release and such information should not be relied upon as representing management's views as of any date subsequent to the date of this document. While we anticipate that subsequent events and developments may cause our views to change, we do not intend to update this forward-looking information, except as required by applicable securities laws.
SOURCE Regal Lifestyle Communities Inc.
For further information: Regal Lifestyle Communities Inc., Mr. Simon Nyilassy, President and Chief Executive Officer, (416) 777-9677