TORONTO and DALLAS, Sept. 30, 2016 /CNW/ - Milestone
Apartments Real Estate Investment Trust (TSX: MST.UN) ("Milestone" or the "REIT") today announced that it has completed the
previously announced internalization of the REIT's asset management function (the "Internalization" or the "Transaction") and also
filed and obtained a receipt for a final base shelf prospectus (the "Shelf Prospectus"). All dollar amounts are in U.S. currency
unless otherwise noted.
Internalization
With closing of the Internalization, the REIT's operating partnership has acquired the REIT's asset manager, TMG Partners L.P.
(the "Asset Manager") for $25.0 million in cash, which is being funded with a drawdown on the REIT's
revolving line of credit, and approximately 5.3 million class B limited partnership units of the REIT's operating partnership
("Class B Units"), which are redeemable on a one-for-one basis for trust units of the REIT ("Units"), subject to a minimum hold
period. The aggregate consideration of $106.5 million was based on the Toronto Stock Exchange 10-day
volume weighted average price of the REIT's units ended July 25, 2016 (the day prior to the
announcement of the Internalization) of C$20.20 and a US$ to C$ exchange rate of US$1 to C$1.3225 based on the Bank of Canada's noon U.S. dollar exchange rate as
at July 25, 2016.
At a special meeting of unitholders of the REIT ("Unitholders") held on September 13, 2016,
Unitholders overwhelmingly voted in favour of the Internalization with the Internalization approved by over 99% of votes cast by
Unitholders. Affiliates of the Asset Manager abstained from voting on the Internalization.
Prior to closing, the Asset Manager was indirectly owned by Robert P. Landin and Jeffrey L. Goldberg. Prior to closing, Messrs. Landin, Goldberg and their joint actors (including MST Investors,
LLC) directly and indirectly owned or exercised control or direction over 19,500 Units and 5,513,675 Class B Units, which together
represented an approximate 7.3% ownership interest in the REIT on a partially diluted basis (assuming all Class B Units held by
Messrs. Landin, Goldberg and their joint actors were redeemed for Units). Following closing, Messrs. Landin, Goldberg and their
joint actors (including MST Investors, LLC) directly and indirectly own or exercise control or direction over 19,500 Units and
10,850,938 Class B Units, which together represent an approximate 13.4% ownership interest in the REIT on a partially diluted basis
(assuming all Class B Units held by Messrs. Landin, Goldberg and their joint actors were redeemed for Units). Messrs. Landin,
Goldberg and their joint actors have informed the REIT that the REIT securities owned by them are held for investment purposes and
that they may, subject to market conditions and in compliance with applicable securities laws, make additional investments in, or
dispositions of, securities of the REIT. A copy of the early warning reports required to be filed by Messrs. Landin and Goldberg
with applicable securities commissions will be filed under the REIT's profile on SEDAR at www.sedar.com and a copy of the early warning reports may also be obtained by contacting Robert Debs, the REIT's
Director of Investor Relations, at 5429 LBJ Freeway, Suite 800, Dallas, TX 75240, or
214-561-1215.
Shelf Prospectus
The Shelf Prospectus was filed with the securities regulatory authorities in each of the provinces and territories of
Canada for the purpose of the sale of securities. The intention of the Shelf Prospectus is to
allow the REIT to more quickly access capital when market opportunities permit.
The Shelf Prospectus is valid for a 25-month period, during which time the REIT may offer and issue, from time to time, trust
units, debt securities, warrants and subscription receipts, or any combination thereof, having an aggregate offering price of up to
C$750 million. Any issue of securities under the shelf prospectus will require the filing of a
prospectus supplement that will include the specific terms of the securities being offered.
This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be
any sale of the securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful. This news release does
not constitute an offer to sell or the solicitation of an offer to buy securities in the United
States and the securities referred to in this news release may not be offered or sold in the
United States absent registration under the U.S. Securities Act of 1933 or pursuant to an applicable exemption from the
registration requirements under the U.S. Securities Act of 1933 and applicable state securities laws.
About Milestone
The REIT is an unincorporated, open-ended real estate investment trust that is governed by the laws of Ontario. The REIT's portfolio consists of 72 multifamily garden-style residential properties, comprising
22,546 apartment units that are located in 14 major metropolitan markets throughout the Southeast and Southwest United States. The REIT is the largest real estate investment trust listed on the TSX focused solely
on the United States multifamily sector. Milestone's vertically integrated platform employs more
than 1,200 employees and manages more than 50,000 apartment units across the United States. For
more information, please visit www.milestonereit.com.
Forward-looking information
This news release may contain forward-looking statements (within the meaning of applicable securities laws) relating to the
business of the REIT and the environment in which it operates. Forward-looking statements are identified by words such as
"believe", "anticipate", "expect," "intend", "plan", "will", "may" and other similar expressions. Some of the specific
forward-looking statements in this news release include, but are not limited to, statements regarding whether the REIT will issue
additional securities pursuant to a prospectus supplement and future intentions of Messrs. Landin and Goldberg with respect to
their securities. Such statements are based on a number of assumptions and are subject to a number of risks and uncertainties, many
of which are beyond the REIT's control that could cause actual results and events to differ materially from those that are
disclosed in or implied by such forward-looking information. There can be no assurance that forward-looking statements will prove
to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements.
Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement
speaks only as of the date on which such statement is made. The REIT undertakes no obligation to publicly update any such statement
or to reflect new information or the occurrence of future events or circumstances.
SOURCE Milestone Apartments REIT
Image with caption: "Milestone Apartments Real Estate Investment Trust (CNW Group/Milestone Apartments REIT)". Image available
at: http://photos.newswire.ca/images/download/20160930_C3783_PHOTO_EN_785563.jpg
