Slate U.S. Opportunity (No. 3) Realty Trust Provides Update on Proposed Transaction with Slate Retail REIT

TORONTO, March 31, 2015 /CNW/ - Slate U.S. Opportunity (No. 3) Realty Trust (the "Trust") provided an update today in connection with its previously announced agreement to sell its assets to Slate Retail REIT (the "REIT") in a US$195 million transaction (7.3% cap rate and US$130 per square foot) (the "Proposed Transaction").

In connection with the anticipated unitholder vote on the Proposed Transaction, the Trust has applied for exemptive relief from the Ontario Securities Commission with respect to the matter described below with a view to ensuring that such vote is structured in a manner that is fair to all unitholders of the Trust.

As previously disclosed, the REIT will issue class U trust units to SUSO 3 as consideration for the acquisition, as well as class B limited partnership units of a subsidiary of the REIT that will be economically equivalent to the class U trust units of the REIT (subject to certain adjustments) and redeemable for cash or such class U trust units.  The Trust will distribute such class U trust units to the Trust's unitholders in a "qualifying exchange" for income tax purposes and will make a special distribution of the Trust's remaining cash balance (estimated to be approximately US$6 million). Pursuant to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"), the Proposed Transaction constitutes a "business combination" for the Trust.  Pursuant to MI 61-101, the Trust is required to obtain minority unitholder approval at a meeting of unitholders from each class of "affected securities" of the Trust, in each case voting separately as a class.

The Trust has applied to the Ontario Securities Commission for exemptive relief from the requirement that unitholder approval be obtained on a class-by-class basis because (i) the declaration of trust of the Trust provides that unitholders will vote as a single class unless the Board determines that the nature of business to be transacted at the meeting affects holders of one class of trust units in a manner materially different from its effect on holders of another class of trust units (in which case the units of the affected class would vote separately); and (ii) in the view of the Trust, the Proposed Transaction will not have such a differential effect on the holders of any class of trust units of the Trust as compared to the other classes of holders of trust units.

If the exemptive relief application regarding the separate class vote is granted in respect of the Trust, then holders of class A units, class F units, class I units and class U units of the Trust, other than units held by interested parties, would vote on the Proposed Transaction pursuant to MI 61-101 as a single class. 

Completion of the transaction remains subject to the completion of due diligence on behalf of the independent committees of each trust, approval of the unitholders of each of the REIT and the Trust in accordance with MI 61-101 and the rules of the Toronto Stock Exchange, approval of the Toronto Stock Exchange, and other customary closing conditions.

About Slate U.S. Opportunity (No. 3) Realty Trust

Slate U.S. Opportunity (No. 3) Realty Trust was established for the primary purpose of indirectly acquiring, owning and leasing a portfolio of diversified revenue-producing commercial real estate properties in the U.S. with a focus on anchored retail properties. SUSO 3 indirectly owns a portfolio of 13 properties.

About Slate Retail REIT

Slate Retail REIT is an open-ended real estate investment trust focused on U.S. grocery-anchored real estate. The REIT's portfolio includes over 40 properties located primarily across the top 50 U.S. metro markets. The REIT is focused on maximizing value through internal organic rental growth and strategic acquisitions. For more information, please visit www.slateretailreit.com.

About Slate Asset Management

Slate Asset Management L.P. is a leading real estate investment platform with over $2.5 billion in assets under management. Slate is a value-oriented company and a significant sponsor of all its private and publicly-traded investment vehicles, which are tailored to the unique goals and objectives of its investors. The firm's careful and selective investment approach creates long term value with an emphasis on capital preservation and outsized returns. Slate is supported by exceptional people, flexible capital and a proven ability to originate and execute on a wide range of compelling investment opportunities. More information is available at www.slateam.com.

Forward-Looking Statements

This press release contains forward-looking statements with respect to the Trust and the Proposed Transaction. These statements generally can be identified by the use of forward-looking words such as "forecast", "may", "will", "would", "expect", "estimate", "anticipate", "intend", "believe" or "continue" or the negative thereof or similar variations. Some of the specific forward-looking statements in this press release include, but are not limited to, statements with respect to the closing of the transaction contemplated herein and the Trust's estimated cash balance following completion of the "qualified exchange". The actual results of the transactions discussed herein could differ materially from those expressed or implied by such statements. Accordingly, readers should not place undue reliance on forward-looking statements. These cautionary statements qualify all forward-looking statements attributable to the Trust and persons acting on its behalf. See the risk factors in the public filings of the Trust. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Some important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, the failure to receive any required approvals or consents in connection with the Proposed Transaction including the exemptive relief, and changes in securities or other laws or regulations or the application thereof. The cautionary statements qualify all forward-looking statements attributable to the Trust and persons acting on its behalf. The assumptions made in making forward-looking statements are referred to in the public filings of the Trust. The assumptions made in making forward-looking statements in this press release also include the assumption that the Trust will be in a position to satisfy the conditions in respect of the Proposed Transaction and complete the transaction.

Unless otherwise stated, all forward-looking statements speak only as of the date of this press release.  Except as required by applicable law, the Trust specifically disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise. Additional information about these assumptions and risks and uncertainties is contained in the Trust's filings with securities regulators, including its latest financial statements and management information circular, copies of which may be obtained on the SEDAR website at www.sedar.com.

SOURCE Slate U.S. Opportunity (No. 3) Realty Trust

Blair Welch, Partner and Co-Founder, Slate Asset Management, 416 644 4267; Brady Welch, Partner and Co-Founder, Slate Asset Management, 416 644 4263