CIM Commercial Trust Corporation (NASDAQ: CMCT and TASE: CMCT-L)
(“we”, “our”, “CMCT”, “CIM Commercial”, or the “Company”), a real
estate investment trust (“REIT”) that principally acquires, owns,
and operates Class A and creative office assets in vibrant and
improving metropolitan communities throughout the United States,
announced today that it is commencing a cash tender offer (the
“Tender Offer”) to purchase up to 2,693,580 shares of its Series L
preferred stock, representing one‑third of the outstanding shares
of Series L preferred stock, at a price of $29.12 U.S. dollars
(“USD”) per share (the “Purchase Price”) or 102.64% of the stated
value of the Series L Preferred Stock (of which $1.39 USD, or
4.90%, reflects the amount of dividends on the Series L Preferred
Stock that will have accrued as of the Expiration Date (as defined
below)), to be paid in New Israeli Shekels as described in the
Offer to Purchase. To the Company’s knowledge, no executive officer
or member of the board of directors of the Company holds Series L
Preferred Stock and, as a result, the Company does not expect any
of such individuals to participate in the offering.
The Purchase Price, together with past payments and dividends
per share paid by the Company in respect of Series L Preferred
Stock, represents a 1.13x multiple on invested capital per share
(on both a USD and ILS basis) since the date of original
issuance.*
The Company expects to fund the purchase of shares in the Tender
Offer from borrowings under its revolving credit facility
(consistent with its targeted capital structure of 45% common
equity and 55% debt and preferred equity).
The Tender Offer will expire at 4:00 P.M., Israel time (9:00
A.M., New York time), on November 20, 2019 (the “Expiration Date”),
unless extended or earlier terminated by the Company. Tenders of
shares must be made on or prior to the expiration of the Tender
Offer and may be withdrawn at any time prior to the expiration of
the Tender Offer, in each case, in accordance with the procedures
described in the Tender Offer materials. The Tender Offer is not
conditioned upon any minimum or maximum number of shares being
tendered, but is subject to certain other conditions as described
in the Offer to Purchase. If more than 2,693,580 shares are
properly tendered and not properly withdrawn, the Company will
purchase shares from all tendering shareholders on a pro rata basis
as specified in the Offer to Purchase.
Specific instructions and a complete explanation of the terms
and conditions of the Tender Offer are contained in the Offer to
Purchase, which, together with the Letter of Transmittal,
Acceptance Notice and related Tender Offer materials, is available
at the website of the Securities and Exchange Commission at
www.sec.gov or by calling Israel Brokerage & Investments,
I.B.I. Ltd., the Israeli tender offer coordinator (“IBI”), at
+972-3-5197915, or Georgeson LLC, the U.S. information agent
(“Georgeson”), at (800) 903-2897. Questions and requests for
assistance by shareholders may be directed to IBI and Georgeson at
such telephone numbers as well.
IBI is serving as the Israeli tender offer coordinator and
Computershare Inc. and its wholly owned subsidiary, Computershare
Trust Company, N.A., are serving together as the U.S. depositary
for the Tender Offer.
The Company’s board of directors authorized the Company to make
the Tender Offer. However, none of the Company, its board of
directors, IBI, Georgeson or Computershare, or any of our or their
respective affiliates or representatives, makes any recommendation
regarding whether shareholders should tender or refrain from
tendering their shares in the Tender Offer. Shareholders must make
their own determination as to whether to tender their shares in the
Tender Offer and, if so, the number of such shares to tender.
Shareholders should carefully evaluate all information in the Offer
to Purchase, the related Letter of Transmittal, the related
Acceptance Notice and other documents related to the Tender Offer
and consult with their own financial and tax advisors before
deciding whether to participate in the Tender Offer.
This press release does not constitute an offer to purchase the
shares. The Tender Offer is made solely pursuant to and in
accordance with the terms and conditions of the Offer to Purchase,
the Letter of Transmittal and the Acceptance Notice. The Tender
Offer is intended only to be available to holders of Series L
preferred stock within the United States and Israel, and we are not
aware of shareholders of Series L preferred stock in any other
jurisdiction.
_______________________________
*The multiples on invested capital rely on the following
assumptions: (1) shares of Series L Preferred Stock were acquired
by a given holder at the original issuance on November 21, 2017
(the “Series L Closing”) at a price of 98.75 ILS per share (or
approximately $28.09 USD per share, as converted at the
representative exchange rate of 3.5160 ILS/USD on November 20,
2017, as published by the Bank of Israel on its website) (the
“Original Issuance Price”); (2) the payment in respect of Series L
Preferred Stock refers to the commitment fee of 2.5% of the
Original Issuance Price that was paid at the Series L Closing to
“classified investors” (representing purchasers of approximately
99.6% of the Series L Preferred Stock issued at the Series L
Closing); (3) the dividend in respect of Series L Preferred Stock
refers to the dividend paid on January 17, 2019 of 6.3552 ILS per
share (or approximately $1.72 USD per share, as converted at the
representative exchange rate of 3.6880 ILS/USD on January 17, 2019,
as published by the Bank of Israel on its website); (4) the
Purchase Price of $29.12 USD, which will be paid in ILS, is assumed
to be converted by the Company at an exchange rate of 3.5330
ILS/USD on October 21, 2019, as published by the Bank of Israel on
its website, for an actual purchase price in respect of tendered
shares (based on such assumed rate) of approximately 102.88 ILS per
share; and (5) the multiples do not include the effect of any
inflation, applicable taxes or spread in exchange ratios, which may
cause actual results to vary materially from the multiples. Any
deviation from these assumptions may lead to a materially different
result. The exchange rate at which the Purchase Price is actually
converted to ILS for payment may vary significantly from these
assumptions. Holders of Series L Preferred Stock are encouraged to
assess their own multiple on invested capital prior to deciding
whether and to what extent to tender their shares of Series L
Preferred Stock.
About CIM Commercial
CIM Commercial is a real estate investment trust that primarily
acquires, owns, and operates Class A and creative office assets in
vibrant and improving metropolitan communities throughout the
United States. Its properties are primarily located in Los Angeles
and the San Francisco Bay Area. CIM Commercial is operated by
affiliates of CIM Group, L.P., a vertically-integrated owner and
operator of real assets with multi-disciplinary expertise and
in-house research, acquisition, credit analysis, development,
finance, leasing, and onsite property management capabilities.
FORWARD-LOOKING STATEMENTS
This press release contains “forward-looking statements”
regarding the Tender Offer. Such forward-looking statements are
based on particular assumptions that management of CIM Commercial
has made in light of its experience, as well as its perception of
expected future developments and other factors that it believes are
appropriate under the circumstances. Forward-looking statements are
necessarily estimates reflecting the judgment of CIM Commercial and
involve a number of risks and uncertainties that could cause actual
results to differ materially from those suggested by the
forward-looking statements. These risks and uncertainties include
those associated with the ability of CIM Commercial to consummate
the Tender Offer, and its timing for such consummation. For a
further list and description of the risks and uncertainties
inherent in forward-looking statements, see CIM Commercial’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2018 and
the Schedule TO relating to the Tender Offer.
Forward-looking statements are not guarantees of performance or
results and speak only as of the date such statements are made. CIM
Commercial undertakes no obligation to publicly update or release
any revisions to its forward-looking statements, whether to reflect
new information, future events, changes in assumptions or
circumstances or otherwise, except as required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191022005563/en/
For CIM Commercial Trust Corporation Media Relations: Bill
Mendel, 212-397-1030 bill@mendelcommunications.com Or Investor
Relations: Steve Altebrando, 646-652-8473
investors@cimcommercial.com
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