VANCOUVER, Jan. 9, 2018
/CNW/ - Pure Industrial Real Estate Trust (TSX: AAR.UN)
("PIRET" or the "Trust") announced today that it has entered into
an arrangement agreement (the "Arrangement Agreement") with an
affiliate of Blackstone Property Partners ("Blackstone"), pursuant
to which Blackstone will acquire all of the outstanding trust units
of PIRET (each, a "Unit") for $8.10
per Unit in an all-cash transaction valued at $3.8 billion including debt (the
"Transaction").
The Transaction price of $8.10 per
Unit represents a 21% premium to the closing price of PIRET Units
on the TSX on January 8, 2018, the
last trading day prior to the announcement of the Transaction, a
22% premium to PIRET's 30-day volume-weighted average Unit price on
the TSX for the period ending January 8,
2018 and a 27% premium to the current research consensus Net
Asset Value estimate of $6.40 per
Unit.
Commenting on the Transaction, Rick
Turner, Chairman of PIRET's Board of Trustees (the "Board of
Trustees") and Chairman of the Special Committee of independent
Trustees (the "Special Committee") formed to supervise the
negotiation of the Transaction said: "The Trust has accomplished
tremendous growth in the ten years since the initial public
offering in August 2007. Since
inception, we have generated a total return in excess of 345% and
we have built a platform that has made us a leader in the Canadian
industrial REIT space. The Board of Trustees believes that the
all-cash Transaction provides significant value for our Unitholders
and unanimously recommends that they vote in favour of the
Transaction."
"I am extremely proud of my team's accomplishments over the past
several years," added Kevan Gorrie
President and CEO of the Trust. "Blackstone is a
highly reputable and strategic owner and one of the world's most
active investors in logistics real estate. We look forward to
further building out our platform."
"We are excited to be acquiring PIRET, one of the premier
Canadian industrial REITs, as a continuation of our global strategy
to acquire high-quality logistics assets in key urban
markets. The management team has done an excellent job
building the portfolio and we look forward to working together
going forward," said Tyler Henritze,
Head of North America Acquisitions for Blackstone Real Estate.
Blackstone will be making this investment through Blackstone
Property Partners ("BPP"), its Core+ real estate investment unit.
BPP targets substantially stabilized office, industrial,
multifamily and retail assets.
The Transaction has the unanimous support of the Special
Committee, as well as the full Board of Trustees of PIRET. The
Board of Trustees, after receiving the unanimous recommendation of
the Special Committee and in consultation with its financial and
legal advisors, has unanimously determined that the Transaction is
in the best interests of PIRET and fair to Unitholders and is
unanimously recommending that Unitholders vote in favour of the
Transaction.
TRANSACTION DETAILS
The Transaction is structured as a statutory plan of arrangement
under the British Columbia Business Corporations Act. Completion of
the Transaction, which is expected to occur in the second quarter
of this year, is subject to customary conditions, including
approval of at least 66 2/3% of the votes cast by Unitholders at a
special meeting of Unitholders, court approval and regulatory
approvals (Canadian Competition Act and Investment Canada
Act).
The Trust will continue to pay its normal monthly distributions
in the ordinary course, consistent with past practice through
closing of the Transaction.
The Arrangement Agreement provides for, among other things,
customary representations, warranties and covenants, including
customary non-solicitation covenants from PIRET and a "fiduciary
out" that allows the Board of Trustees to accept a superior
proposal in certain circumstances, subject to a "right to match" in
favour of Blackstone and payment of a $77
million termination fee to Blackstone. In certain
circumstances, Blackstone is required to pay a $220 million break fee to PIRET upon the
termination of the Arrangement Agreement.
The foregoing summary is qualified in its entirety by the
provisions of the Arrangement Agreement, a copy of which will be
filed on SEDAR at www.sedar.com. The Trust will mail a management
information circular and certain related documents to Unitholders
in connection with the meeting to consider and vote on the
Transaction, copies of which will be filed on SEDAR at
www.sedar.com. All references to $ above are to Canadian
dollars.
Advisors
BMO Capital Markets is acting as financial advisor to PIRET and
has provided the Special Committee and the Board of Trustees with a
fairness opinion in respect of the Transaction. Goodmans LLP is
acting as legal counsel to PIRET in connection with the
Transaction. Greenhill & Co. has provided the Special Committee
and the Board of Trustees with a fairness opinion in respect of the
Transaction.
RBC Capital Markets and Citigroup are acting as financial
advisors to Blackstone. Osler,
Hoskin & Harcourt LLP and Simpson Thacher & Bartlett LLP
are acting as legal counsel to Blackstone.
ABOUT PURE INDUSTRIAL REAL ESTATE TRUST
PIRET is an unincorporated, open-ended investment trust that
owns and operates a diversified portfolio of income-producing
industrial properties in leading markets across Canada and key distribution and logistics
markets in the United States. The
Trust is an internally managed REIT and is one of the largest
publicly-traded REITs in Canada
that offers investors exposure to industrial real estate assets in
Canada and the United States.
Additional information about the Trust is available at
www.piret.ca or www.sedar.com.
ABOUT BLACKSTONE
Blackstone is a global leader in real estate investing.
Blackstone's real estate business was founded in 1991 and has
approximately US$111 billion in
investor capital under management. Blackstone's real estate
portfolio includes hotel, office, retail, industrial and
residential properties in the US, Europe, Asia
and Latin America. Major holdings include Hilton Worldwide,
Invitation Homes (single family homes), Logicor (pan-European
logistics) and prime office buildings in the world's major
cities. Blackstone real estate also operates one of the
leading real estate finance platforms, including management of the
publicly traded Blackstone Mortgage Trust.
FORWARD-LOOKING INFORMATION
Certain statements contained in this news release may
constitute forward-looking information within the meaning of
applicable Canadian securities laws. Forward-looking information is
often, but not always, identified by the use of words such as
"anticipate", "plan", "expect", "may", "will", "intend", "should",
and similar expressions. This information involves known and
unknown risks, uncertainties and other factors that may cause
actual results or events to differ materially from those
anticipated in such forward-looking information. Forward looking
information in this news release includes, but is not limited to,
the following: statements with respect to the expected
completion of the Transaction, the anticipated benefits to the
Unitholders, satisfaction of the conditions required with respect
thereto and the payment of monthly distributions prior to closing.
There can be no assurance that the proposed Transaction will be
completed, or that it will be completed on the terms and conditions
contemplated in this Arrangement Agreement.
The forward-looking information contained in this news
release is based on certain expectations and assumptions made by
the Trust, including: expectations and assumptions concerning
receipt of required approvals and the satisfaction of
other conditions to the completion of the Transaction; and
that the Arrangement Agreement will not be amended or
terminated.
Although the Trust believes that the expectations and
assumptions on which the forward-looking information contained in
this news release is based are reasonable, undue reliance should
not be placed on the forward-looking information because the Trust
can give no assurance that it will prove to be correct. Since
forward-looking information addresses future events and conditions,
by its very nature it involves inherent risks and uncertainties.
Actual results could differ materially from those currently
anticipated due to a number of factors and risks. These include,
but are not limited to, the failure to obtain necessary approvals
or satisfy the conditions to closing the Arrangement
Agreement; the occurrence of any event, change or other
circumstance that could give rise to the termination of the
Arrangement Agreement; material adverse changes in the business or
affairs of the Trust; the parties' ability to obtain regulatory
approvals in order to complete the Arrangement Agreement;
either party's failure to consummate the Transaction when
required; competitive factors in the industries in which the Trust
operates; interest rates, prevailing economic conditions; and other
factors, many of which are beyond the control of the Trust.
Additional factors and risks which may affect PIRET or its business
are described in PIRET's annual information form and PIRET's
management's and discussion and analysis for the year ended
December 31, 2016 and in the other
reports filed under the Trust's profile on www.sedar.com.
The forward-looking information contained in this news
release represents Trust's expectations as of the date hereof, and
is subject to change after such date. The Trust disclaims any
intention or obligation to update or revise any
forward-looking information whether as a result of new information,
future events or otherwise, except as required under applicable
securities regulations.
THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT
ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF THIS
RELEASE.
SOURCE Pure Industrial Real Estate Trust (PIRET)