TOLEDO, Ohio, March 7, 2022 /PRNewswire/ --
Welltower® Inc. (NYSE: WELL) (the "Company") today announced
that it intends to implement a holding company reorganization (the
"Reorganization") that would structure Welltower as
an Umbrella Partnership Real Estate Investment Trust, or
UPREIT. In the Reorganization, a new holding company ("New
Welltower") will become the publicly traded parent company and will
inherit the name "Welltower Inc." The current real estate
investment trust ("Old Welltower") will exist as a wholly owned
subsidiary of New Welltower initially called "Welltower OP Inc."
and, subject to approval of New Welltower's shareholders, convert
to a Delaware limited liability
company, "Welltower OP LLC" (the "LLC Conversion").
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"We are pleased to avail ourselves of this corporate structure,
better aligning us with the REIT industry, which will enhance our
ability to compete in the acquisition of real estate assets.
The conversion, once approved, is a seamless process which
will have no impact on our existing shareholders, debt security
holders, lenders or other constituencies," said Shankh Mitra,
Welltower's Chief Executive Officer and Chief Investment Officer.
"Additionally, we believe that the conversion will further expand
our already robust external growth pipeline, as OP units
potentially offer a unique tool for sellers seeking tax deferral
and advanced tax planning."
The Reorganization is intended to align Welltower's corporate
structure with other publicly traded U.S. real estate investment
trusts and provide a platform for Welltower to more efficiently
acquire properties in a tax-deferred manner. The UPREIT
structure will allow owners of appreciated property to contribute
such property to an "operating partnership" in exchange for
partnership interests therein. Subject to applicable tax
requirements, this type of contribution may be done on a
tax-deferred basis for the contributors. Following the LLC
Conversion, Welltower OP LLC would function as the operating
partnership in the UPREIT structure. Partnership interests in
Welltower OP LLC will generally entitle its holders to receive the
same distributions as holders of New Welltower common stock, and
the holders of such interests will generally be entitled to
exchange the partnership interests for cash or common stock, at
Welltower's option.
The Reorganization is not anticipated to have any impact on the
financial position of Welltower and will not result in any changes
to the combined financial statements of the Company, its
outstanding debt securities, or business operations. The
Reorganization will not impact the payment of the dividend declared
by the Company's board and payable to shareholders of
record in accordance with previously announced dividend payment
dates.
New Welltower will replace Old Welltower as the public company
listed on the New York Stock Exchange (the "NYSE") and New
Welltower common stock will trade on the NYSE on an uninterrupted
basis under the existing symbol "WELL" and will retain the CUSIP
number of 95040Q104. The NYSE ticker symbols of Welltower's 4.800%
Notes due 2028 (CUSIP number 95040QAA2, NYSE: WELL28) and $4.500%
Notes due 2034 (CUSIP number 95040QAB0, NYSE: WELL34) will change,
respectively, to WELL/28 and WELL/34 and these notes will retain
their existing CUSIP numbers.
The first step of the Reorganization will be to effectuate a
holding company reorganization of Old Welltower (the "Merger"),
where New Welltower will succeed Old Welltower as the parent
entity. At the Effective Time (as defined below), each share
of Old Welltower common stock issued and outstanding immediately
prior to the Merger will be converted into an issued and
outstanding share of New Welltower common stock, having the same
designations, rights, powers and preferences and the
qualifications, limitations and restrictions as the corresponding
share of Old Welltower common stock being converted. Accordingly,
upon consummation of the Merger, Old Welltower's shareholders
immediately prior to the consummation of the Merger will become
shareholders of New Welltower. Pursuant to Section 251(g) of
the General Corporation Law of the State
of Delaware (the "DGCL"), the Merger will not require
approval by Old Welltower's shareholders. Upon the completion
of the Merger, and going forward, Old Welltower will own all of
Welltower's assets (other than certain de minimis assets that may
be held by New Welltower directly for certain administrative
functions). All business activities will be owned by and
conducted through Old Welltower, as is typical of an UPREIT
structure. All material indebtedness of Old Welltower immediately
prior to the Merger is expected to be indebtedness of Old Welltower
after the Merger.
As required by Section 251(g) of the DGCL, the certificate of
incorporation of Old Welltower will be amended in connection with
the Merger to add a "Pass-Through Vote Provision." The
Pass-Through Vote Provision will require the shareholders of New
Welltower to approve any act or transaction by or involving Old
Welltower (other than the election or removal of directors) that
would have required the approval of the shareholders of Old
Welltower if taken by Old Welltower prior to the Effective Time, by
the same vote as was required by the DGCL and/or by the certificate
of incorporation or bylaws of Old Welltower in effect immediately
prior to the Effective Time.
Under the DGCL, a conversion of a Delaware corporation to a limited liability
company requires the unanimous approval of all shareholders, voting
and nonvoting. Normally, New Welltower could approve the LLC
Conversion in its capacity as sole shareholder of Old Welltower.
However, due to the Pass-Through Vote Provision, all of the
shareholders of New Welltower would also have to approve the LLC
Conversion. New Welltower will have over 447 million shares
outstanding, held by more than 3,100 record and beneficial holders,
making the unanimous shareholder approval requirement for the LLC
Conversion time consuming, expensive, and likely impossible to
achieve. Therefore, in order to provide the benefits of the
Reorganization to New Welltower shareholders, Old Welltower expects
to include a proposal (the "Proposal") in its proxy statement for
its 2022 annual shareholders' meeting to allow the shareholders,
voting as shareholders of New Welltower, to approve the removal of
the Pass-Through Vote Provision so that the LLC Conversion may
be approved solely by New Welltower.
The Merger is scheduled to be effective as of April 1, 2022 (the "Effective time").
If New Welltower's shareholders approve the Proposal, the LLC
Conversion is expected to be effective shortly following the
2022 annual meeting of shareholders.
For more information on the Reorganization, please see
the Form 8-K filed by Welltower Inc. with
the Securities and Exchange Commission on March 7,
2022. A set of FAQs is also available
on Welltower's website
at https://welltower.com/UPREITfaq.
About Welltower
Welltower Inc. (NYSE:
WELL), an S&P 500 company headquartered
in Toledo, Ohio, is driving the transformation of health
care infrastructure. The Company invests with leading seniors
housing operators, post-acute providers and health systems to fund
the real estate and infrastructure needed to scale innovative care
delivery models and improve people's wellness and overall health
care experience. Welltower, a real estate investment trust,
owns interests in properties concentrated in major, high-growth
markets in the United States, Canada and
the United Kingdom, consisting of seniors housing, post-acute
communities and outpatient medical properties. More information is
available at www.welltower.com.
Forward-Looking Statement
This press release may
contain "forward-looking" statements as defined in the Private
Securities Litigation Reform Act of 1995. When the Company uses
words such as "may," "will," "intend," "should," "believe,"
"expect," "anticipate," "project," "estimate" or similar
expressions that do not relate solely to historical matters, it is
making forward-looking statements. Forward-looking statements,
including, but not limited to, statements regarding the Company's
ability to complete the Reorganization, the impacts of the
Reorganization on the Company's financial condition, business
operations, financial statements and outstanding securities and the
Company's ability to realize the expected benefits of
Reorganization, are not guarantees of future performance and
involve risks and uncertainties that may cause the Company's
actual results to differ materially from the Company's expectations
discussed in the forward-looking statements. This may be a result
of various factors, including, but not limited to, those factors
discussed in the Company's reports filed from time to time with
the SEC. The Company undertakes no obligation to update or
revise publicly any forward-looking statements, whether because of
new information, future events or otherwise, or to update the
reasons why actual results could differ from those projected in any
forward-looking statements.
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SOURCE Welltower Inc.