VANCOUVER, Aug. 24, 2018 /CNW/ - Pure Multi-Family REIT LP
("Pure Multi-Family" or the "REIT") (TSXV: RUF.U, RUF.UN, RUF.DB.U;
OTCQX: PMULF) announced today that the special committee of
independent directors (the "Special Committee"), appointed to run a
strategic process including the potential sale of the REIT, has
terminated the formal process to explore the potential sale of the
REIT announced on April 5, 2018.
The sale process was commenced following the issuance of a news
release by Electra America ("Electra") on April 3, 2018 announcing that it had made a
proposal to the Board to acquire all of the Class A Units of the
REIT for US$7.59 per Unit. The
news release stated that Electra's proposal was not conditional on
financing and that Electra would be able to move quickly and
effectively to close the transaction upon completion of due
diligence.
As disclosed by the REIT in its own news release on April 3, 2018, the REIT initially received a
conditional proposal from Electra on December 12, 2017 to acquire all of the Class A
Units for US$7.54 per Unit. The
Board, on the recommendation of the Special Committee following its
receipt of financial and legal advice, rejected that proposal on
January 17, 2018 as inadequate.
On March 26, 2018, the REIT received
a marginally more favourable proposal from Electra, pursuant to
which it agreed to pay an additional US$0.05 per Unit, for a total of US$7.59 per Unit. Following the receipt of
financial and legal advice, the REIT concluded that the revised
proposal remained inadequate.
On April 5, 2018, the REIT
announced that, as part of a strategic review, it would commence a
formal process to explore the potential sale of the REIT. The REIT
also noted that Electra's proposals were highly conditional,
required a 30-day exclusivity period and would be withdrawn if
their existence was publicly disclosed.
The sale process was conducted by the REIT over several months
with the assistance of Scotiabank. 86 parties were contacted
out of which 24 parties executed non-disclosure agreements and were
provided access to Pure Multi-Family's data room. During
phase one of the process, the REIT received feedback from potential
buyers as to likely ranges of values that they would be prepared to
pay, including comments that, despite their overall positive views
on the quality of the REIT's portfolio: (i) the price that had been
publicly disclosed by Electra effectively established a "floor" and
(ii) several multi-family real estate portfolios in excess of
$1 billion were being concurrently
marketed. Additionally, there were media articles and unitholder
activity relating to the REIT's annual meeting that may have
created some uncertainty for potential bidders. Potential
bidders were asked to submit phase one non-binding proposals by
June 6, 2018.
Two potential bidders submitted proposals at the end of phase
one, the highest of which was US$7.71
per Unit and not conditional on financing. Both interested
parties were selected to participate in phase two and were provided
with further due diligence materials and an offer of access to the
REIT's properties in order to conduct site visits. A form of
arrangement agreement was provided to the interested parties by the
REIT. The bid deadline for phase two final binding bids was
July 30, 2018. Despite extensive site visits, requests for
additional site visits for third party reports and active
negotiation of the arrangement agreement, no bids were received on
that date.
One of the bidders advised that, while it would not be
submitting a bid, it would like to meet to discuss the possibility
of reaching an agreement outside the formal process. On
August 7, 2018, Robert King, Chair of the Special Committee,
travelled to join Scotiabank at a meeting with that bidder's
advisors to discuss terms of a potential deal. The bidder
advised that it was prepared to make an offer of US$7.64 per Unit, although its proposal in phase
one was US$7.71. The bidder also
asked for an exclusivity period in order to explore financing
options, to complete confirmatory due diligence and to settle on a
form of arrangement agreement. Over the course of the following two
weeks, the Special Committee sought to resolve all key deal terms
with a view to bringing a transaction to unitholders for approval.
On August 23, 2018, the bidder
advised that it was no longer pursuing a potential transaction with
the REIT.
A significant amount of the REIT's time and resources have been
committed to the sale process. From the beginning of the process
through the subsequent negotiations with the one bidder, the
Special Committee and the Board held over 50 meetings with its
financial and/or legal advisors so the REIT could respond in a
timely fashion during every step of the process. Given the
outcome of the process, the Board and management will re-focus
their efforts on existing operations and will consider potential
future strategic opportunities that may become available to the
REIT to maximize unitholder value.
About Pure Multi-Family REIT LP
Pure Multi-Family is a Canadian based, publically traded vehicle
which offers investors exclusive exposure to attractive,
institutional quality U.S. multi-family real estate assets.
Additional information about Pure Multi-Family is available at
puremultifamily.com and sedar.com.
Forward-Looking Information:
Certain statements in this news release may constitute
"forward-looking information" within the meaning of applicable
securities laws. Forward-looking information involves known and
unknown risks, uncertainties and other factors, and it may cause
actual results, performance or achievements or industry results, to
be materially different from any future results, performance or
achievements or industry results expressed or implied by such
forward-looking information. Forward-looking information generally
can be identified by the use of terms and phrases such as
"anticipate", "believe", "could", "estimate", "expect", "feel",
"intend", "may", "plan", "predict", "project", "subject to",
"will", "would", and similar terms and phrases, including
references to assumptions. Some of the specific
forward-looking information referred to in this news release
includes, but is not limited to, a statement that the REIT will
re-focus on its operations and will consider future opportunities
to maximize unitholder value.
The forward-looking information contained in this news release
are based on certain key expectations and assumptions made by Pure
Multi-Family in light of current conditions and expected future
developments, as well as other factors Pure Multi-Family believes
are appropriate in the circumstances.
Although Pure Multi-Family believes that the expectations and
assumptions on which the forward-looking information are based are
reasonable, undue reliance should not be placed on the
forward-looking information because Pure Multi-Family can give no
assurance that they will prove to be correct. Since forward-looking
information addresses future events and conditions, by their very
nature they involve inherent risks and uncertainties. Actual
results could differ materially from those currently anticipated
due to a number of factors and risks. These include, without
limitation, the risk that the strategic review process may not
result in a transaction and those factors that can be found under
"Risk Factors" in Pure Multi-Family's Annual Information Form dated
March 21, 2018 and under "Risks and
Uncertainties" in Pure Multi-Family's Management's Discussion and
Analysis dated August 8, 2018, both
of which are available on SEDAR at sedar.com.
The forward-looking information contained in this news release
represent Pure Multi-Family's expectations as of the date hereof,
and are subject to change after such date. Pure Multi-Family
disclaims any intention or obligation to update or revise any
forward-looking information except as required by law.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES
PROVIDER (as that term is defined in policies of the TSX Venture
Exchange) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY
OF THIS RELEASE.
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SOURCE Pure Multi-Family REIT LP