Expected Closing Date of Spin-Off on or
about December 31, 2021
TORONTO, Dec. 13, 2021 /CNW/ - H&R Real Estate
Investment Trust ("H&R" or "the REIT") (TSX: HR.UN) today
announced that the previously announced spin-off of its Primaris
properties including all of its enclosed malls to a new
stand-alone, publicly traded real estate investment trust
("Primaris REIT"), to be implemented by way of plan of arrangement
(the "Arrangement"), has received the requisite unitholder approval
at H&R's special meeting of unitholders held on December 13, 2021 (the "Meeting"). As a
result of the Arrangement (including an expected 4:1 consolidation
of Primaris REIT units pursuant to the Arrangement), holders of
H&R units will ultimately receive one-quarter of a Series A
unit of Primaris REIT ("Primaris REIT Units") for every one H&R
unit held. Of the votes cast at the Meeting with respect to the
Arrangement, an aggregate of 176,170,369 H&R voting units
(99.72% of the votes cast) were voted in favour of the special
resolution to approve the Arrangement. In connection with the
approval of the Arrangement, H&R unitholders also passed an
ordinary resolution approving, on behalf of Primaris REIT and the
holders of Primaris REIT Units, the equity-based compensation plans
for Primaris REIT. The results of the matters considered at the
Meeting will be reported in H&R's Report of Voting Results to
be filed on SEDAR (www.sedar.com).
The Arrangement forms part of H&R's strategic repositioning
plan to transform from a diversified REIT, into a simplified,
growth-oriented REIT with increased multi-residential and
industrial exposure, announced on October
27, 2021.
"I am very pleased with this transformative transaction,
solidifying the progression of H&R's repositioning and
successfully positioning Primaris as a well-capitalized,
fully-independent REIT," said Tom
Hofstedter, President and CEO of H&R. "The scale and
strength of the Primaris platform combined with its unique
financial model provides significant flexibility and capacity to
self-fund its strategy and positions it well to pursue investment
opportunities. At H&R, our teams are working hard implementing
our five-year strategic plan, where we are committed to efficient
and effective execution to surface value, and drive growth."
Rags Davloor Appointed CFO of Primaris REIT
H&R REIT and the incoming Board of Trustees and senior
management of Primaris REIT are pleased to announce the appointment
of Rags Davloor as Chief Financial Officer (CFO) of Primaris REIT,
subject to completion of the Arrangement. Mr. Davloor brings
extensive experience to the role, including previous CFO roles with
Canadian REITs and real estate companies, as well as having worked
as a strategic advisor, as President & Chief Operating Officer
of a large Canadian retail REIT, as a senior investment banker at a
Canadian bank, and accounting roles with a specialty in tax
accounting.
"We are thrilled to round out the senior management team of
Primaris REIT with an executive of Rags Davloor's calibre. He
brings deep experience spanning public company reporting and
accounting, M&A, operations and strategic planning," said
Alex Avery, incoming Chief Executive
Officer of Primaris REIT. "Over the course of his career, Rags has
cultivated broad and deep relationships in Canadian capital
markets, and we expect those relationships to enhance investor
confidence in Primaris REIT."
Closing of the Arrangement
Completion of the Arrangement remains subject to certain
conditions, including final court approval and receipt of an
advance income tax ruling from Canada Revenue Agency. The final
hearing to approve the Arrangement is scheduled to be held on
December 15, 2021. If the final court
order is granted and all other conditions precedent to the
Arrangement are satisfied or waived, H&R expects that the
Arrangement will be completed after the close of market on or about
December 31, 2021. Immediately after
completion of the Arrangement, the previously announced
contribution to Primaris REIT of eight retail properties by the
Healthcare of Ontario Pension Plan ("HOOPP") is expected to close
such that by the end of the day on December
31, 2021, H&R unitholders and HOOPP will directly own
approximately 74% and 26%, respectively, of Primaris REIT units
issued and outstanding.
H&R has received conditional approval from the Toronto Stock
Exchange (the "TSX") for the listing and posting for trading of the
Primaris REIT Units. Listing of the Primaris REIT Units is subject
to, among other things, satisfaction of the customary listing
conditions of the TSX. Subject to satisfaction of these and
other conditions, H&R anticipates the Primaris REIT Units will
begin trading on the TSX under the trading symbol "PMZ.UN" on or
about January 6, 2022.
H&R has been advised by the TSX that "due bill" trading will
apply in connection with closing of the Arrangement. Further
details will be provided in a subsequent announcement once the
closing date for the Arrangement has been firmly determined.
H&R's previously announced regular cash distribution
$0.0575 per H&R unit, payable on
January 12, 2022 to unitholders of
record on December 31, 2021, and
special distribution of $0.73 per
H&R unit, payable in additional units ($0.63 per unit) and cash ($0.10 per unit) to all unitholders of record as
at December 31, 2021, will not be
subject to "due bill" trading, and will continue to be paid in the
ordinary course.
Normal Course Issuer Bid
H&R today also announced receipt of final acceptance from
the TSX of H&R's notice of intention to make a normal course
issuer bid ("NCIB"). Under the NCIB, H&R will have the ability
to purchase for cancellation up to a maximum of 14,000,000 units of
H&R ("Units") on the open market, representing approximately
4.95% of the public float as of December
8, 2021. As at December 8,
2021, H&R had 288,431,251 outstanding Units.
The NCIB will commence on December 16,
2021 and remain in effect until the earlier of December 15, 2022 and the date on which H&R
has purchased the maximum number of Units permitted under the NCIB.
Purchases of Units under the NCIB will be made in accordance with
TSX rules and policies through the facilities of the TSX, and
through Canadian alternative trading systems. The Units so
purchased will be cancelled. The price paid for any repurchased
Units will be the market price of such Units at the time of
acquisition. The average daily trading volume of the Units over the
prior six months was 692,519 and accordingly daily purchases will
be limited to 173,129 Units other than block purchase
exemptions.
H&R believes that its outstanding Units represent an
attractive investment, and the ongoing purchase of its outstanding
Units may benefit all persons who continue to hold Units by
increasing their equity interest in H&R.
H&R may establish an automatic purchase plan under which its
broker may purchase Units according to a prearranged set of
criteria. The plan would enable the purchase of Units at any time,
including when H&R would not ordinarily be active in the market
because of internal trading blackout periods, insider trading rules
or otherwise. The plan will terminate on the earliest of: the date
on which the purchase limits specified in the plan have been
attained, the date on which the NCIB terminates or the date on
which the plan is terminated by a party in accordance with its
terms. To H&R's knowledge, after reasonable inquiry, none of
the trustees, officers or other insiders of H&R or any
associate of any such persons, or any associate or affiliate of
H&R currently intends to sell Units to H&R during the
course of the issuer bid.
About H&R REIT
H&R REIT is one of Canada's
largest real estate investment trusts with total assets of
approximately $13.1 billion at
September 30, 2021. H&R REIT has
ownership interests in a North American portfolio of high-quality
office, retail, industrial and residential properties comprising
over 40 million square feet. H&R is currently undergoing a
five-year, strategic repositioning to transform into a simplified,
growth-oriented company focusing on multi-residential and
industrial properties to surface significant value for
unitholders.
About Primaris REIT
Primaris REIT will become Canada's only enclosed shopping centre focused
REIT, following its spin-off from H&R REIT and combination with
a portfolio of properties contributed by Healthcare of Ontario
Pension Plan (HOOPP) expected on or about December 31, 2021. Primaris REIT will own
interests in primarily enclosed shopping centres aggregating 11.4
million square feet and valued at approximately $3.2 billion at Primaris REIT's share. Primaris
REIT will be fully independent, with a differentiated low-leverage
financial profile and a fully internal, vertically integrated,
at-scale management platform.
Forward-looking Information
Certain statements in this news release contain forward-looking
statements within the meaning of applicable securities laws (also
known as forward-looking statements). These forward-looking
statements include, but are not limited to statements with respect
to the Arrangement, the satisfaction or waiver of conditions in
connection with the Arrangement, the expected timing of the
Arrangement, the expected timing for obtaining the final order, the
listing and trading of Primaris REIT Units, the closing of the
transaction with HOOPP, the expected "due bill" trading of H&R
units, the appointment of Rags Davloor as CFO of Primaris REIT, the
square footage and value of Primaris REIT's portfolio, H&R's
intention to repurchase Units in the open market, H&R's beliefs
regarding the benefits of persons who hold Units and other
statements contained in this release that are not historical
facts. Such forward-looking statements reflect H&R's
current beliefs and are based on information currently available to
management. These statements are not guarantees of future
performance or events and are based on H&R's estimates and
assumptions that are subject to risks and uncertainties, including
those set forth in H&R's management information circular dated
November 5, 2021 and in H&R's
materials filed with the Canadian securities regulatory authorities
from time to time, which could cause the actual results and
performance of H&R to differ materially from the
forward-looking statements contained in this news release. Although
the forward-looking statements contained in this news release are
based upon what H&R believe are reasonable assumptions, there
can be no assurance that actual results will be consistent with
these forward-looking statements. There can be no assurance that
the proposed transaction will occur or that the anticipated
benefits will be realized. The proposed transaction is subject to
approval by the Court of Queen's Bench of Alberta and the fulfillment or waiver of
certain conditions, and there can be no assurance that any such
approvals will be obtained and/or any such conditions will be met.
The proposed transaction could be modified, restructured or
terminated. All forward-looking statements in this news release are
qualified by these cautionary statements. These forward-looking
statements are made as of today and H&R, except as required by
applicable law, assumes no obligation to update or revise them to
reflect new information or the occurrence of future events or
circumstances.
Additional information regarding H&R is available at
http://www.hr-reit.com and on www.sedar.com.
SOURCE H&R Real Estate Investment Trust