TORONTO, May 4, 2018 /CNW/ - Choice Properties Real Estate
Investment Trust (TSX:CHP.UN, "Choice Properties") and Canadian Real Estate Investment Trust (TSX:REF.UN, "CREIT")
today announced the successful completion of the previously announced plan of arrangement (the "Transaction"), which immediately
results in the creation of Canada's premier diversified real estate investment trust. The
combined entity will operate as Choice Properties and will continue to trade on the Toronto Stock Exchange under the symbol
CHP.UN. The enterprise value will be approximately $16 billion.
"Choice Properties will take an industry leading position as an owner, manager and developer of high-quality real estate",
said Stephen Johnson, President and Chief Executive Officer. "This transformational Transaction
provides a tremendous opportunity for growth. We have a highly skilled team of real estate professionals ready to execute
an exciting new strategy and create long term value for our Unitholders."
The total real estate portfolio includes 754 properties comprising approximately 69 million square feet of gross leasable
area. The retail real estate is focused primarily on necessity-based retail tenants and therefore provides a solid foundation of
stable and growing cash flows. The balance of the real estate portfolio is comprised of high-quality industrial assets and office
assets concentrated in Canada's largest markets.
The consolidated development pipeline provides meaningful value creation opportunities. This includes the potential to grow an
established retail development and intensification program, but more significantly, the combined entity has more than 60 sites
for new development as residential-focused, mixed-use communities, many of which are in close proximity to public
transportation.
Leadership and Governance
Stephen Johnson, Rael Diamond, and Mario
Barrafato have assumed leadership roles at Choice Properties as President and Chief Executive Officer, Chief Operating
Officer and Chief Financial Officer, respectively. John Morrison has stepped down as President and
Chief Executive Officer of Choice Properties and will serve as non-executive Vice Chairman providing guidance to the combined
organization.
In connection with the completion of the Transaction, the Choice Properties Board of Trustees has appointed Stephen Johnson, Karen Kinsley and Michael
Latimer, all former CREIT trustees, to serve on the Choice Properties board while Dan
Sullivan, Lead Trustee for Choice Properties, has stepped down from the Choice Properties Board.
Transaction Details
CREIT Unitholders had the ability to choose whether to receive $53.75 in cash or 4.2835 Choice
Properties units for each CREIT unit held, subject to proration. Unitholders that elected to receive Choice Properties units will
not be subject to proration. Unitholders that elected to receive cash, or were deemed to have elected to receive cash, will
receive Choice Properties units in respect of approximately 49% of their CREIT units as a result of proration. The total
consideration pursuant to the Transaction consisted of approximately $1.65 billion in cash and the
issuance of approximately 183 million Choice Properties units. Choice Properties now has approximately 277 million units
outstanding.
In connection with the Transaction, Loblaw Companies Limited ("Loblaw") converted all of its outstanding Class C
LP units of Choice Properties Limited Partnership ("Choice Properties LP") with a face value of $925 million into a combination of Class B LP units of Choice Properties LP and cash on closing.
Loblaw and George Weston Limited have an effective interest of approximately 62% and 4% of the combined entity, respectively.
Approximately 34% of Choice Properties units are now owned publicly, including former CREIT Unitholders which represent
approximately 27% of the total ownership.
CREIT's units are expected to be delisted from the Toronto Stock Exchange at the close of trading on May 7, 2018. CREIT will apply to cease to be a reporting issuer in all of the provinces and territories of
Canada. Prior to the closing of the Transaction, CREIT terminated its distribution reinvestment
plan and unit purchase plan (the "Plans"), with all units administered under the Plans allocated in accordance with such plan and
the plan of arrangement.
Choice Properties intends to maintain its current distribution of $0.74 per unit on an annual
basis and recently announced that it has temporarily suspended its distribution reinvestment plan beginning with distributions
declared in May 2018. CREIT Unitholders who received Choice Properties units as part of their
consideration under the Transaction will benefit from an approximately 70% increase in their cash distributions, relative to
their former annual distributions from CREIT.
Forward-Looking Statements
This press release for Choice Properties and CREIT contains forward-looking statements about the combined entity including:
the combined entity's financial position; growth prospects of the combined entity; certain strategic benefits of the Transaction;
distribution policy; intensification and development opportunities; and the combined entity's anticipated future results and
projected growth. Forward-looking statements reflect current estimates, beliefs and assumptions, which are based on Choice
Properties' and CREIT's perception of historical trends, current conditions and expected future developments, as well as other
factors management believes are appropriate in the circumstances. Choice Properties' and CREIT's estimates, beliefs and
assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies
regarding future events and as such, are subject to change. Choice Properties and CREIT can give no assurance that such
estimates, beliefs and assumptions will prove to be correct.
Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect Choice Properties' and
CREIT's expectations only as of the date of this release. Choice Properties and CREIT disclaim any obligation to update or revise
any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by
law.
For additional information, visit www.choicereit.ca or
Choice Properties' issuer profile at www.sedar.com
SOURCE Choice Properties Real Estate Investment Trust
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