/NOT FOR DISTRIBUTION OR DISSEMINATION INTO THE UNITED STATES OR THROUGH U.S. NEWS WIRE SERVICES/
NEW GLASGOW, NS, May 31, 2016 /CNW/ - Crombie Real Estate Investment Trust ("Crombie" or the "REIT") (TSX: CRR.UN) announced today that it has closed its previously announced offering to the public, on a bought deal basis, of 8,952,400 Subscription Receipts at a price of $14.70 per Subscription Receipt for aggregate gross proceeds of approximately $131.6 million (the "Offering").
On the closing, targeted for the end of June 2016, of Crombie's previously announced agreement with wholly-owned subsidiaries of Empire Company Limited ("Empire") to purchase 1) a portfolio of nineteen (19) retail properties, 2) a 50% interest in three distribution centres, and 3) two parcels of development land adjacent to existing REIT properties, and to invest in the renovation and expansion of 10 properties anchored by Sobeys Inc. and currently owned by Crombie (the "Transaction"), each Subscription Receipt will convert into one trust unit of the REIT. If the Transaction does not close by August 31, 2016, the subscription price will be returned to holders together with any interest earned thereon.
Pursuant to the Transaction, subsidiaries of Empire have agreed to take back 6,353,741 Class B LP Units of Crombie Limited Partnership, together with the attached Special Voting Units of Crombie, on the closing of the Transaction, equivalent to approximately $93.4 million at the same $14.70 price as the Subscription Receipts that are being offered to the public. Each Class B LP Unit is exchangeable for one Unit of Crombie at the option of the holder. Upon exchange of a Class B LP Unit, the associated Special Voting Unit is cancelled. All securities issued to subsidiaries of Empire under the Transaction are subject to a four month hold period from the closing date of the Transaction. Immediately following the closing of the Transaction and the conversion of the Subscription Receipts, Empire is expected to continue to indirectly hold a 41.5% economic and voting interest in Crombie (40.3% on a fully-diluted basis).
The Transaction is subject to receipt of approvals under the Competition Act (Canada) and approval by majority vote of Crombie's Unitholders, other than Empire and its subsidiaries, at a meeting of Unitholders to take place on June 28, 2016 in New Glasgow, Nova Scotia.
The underwriting syndicate was co-led by CIBC Capital Markets, BMO Capital Markets, Scotiabank and TD Securities Inc., and included National Bank Financial Inc., RBC Dominion Securities Inc., Canaccord Genuity Corp., Raymond James Ltd. and Desjardins Securities Inc.
This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, any securities in any jurisdiction. The Subscription Receipts and Units have not been and will not be registered under the United States Securities Act of 1933, as amended, or applicable state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.
Crombie is an open-ended real estate investment trust established under, and governed by, the laws of the Province of Ontario. Crombie currently owns a portfolio of 261 retail, mixed use and office properties across Canada, comprising approximately 17.1 million square feet with a strategy to own and operate a portfolio of high quality grocery and drug store anchored shopping centres and freestanding stores primarily in Canada's top 36 markets.
This news release contains forward-looking statements that reflect the current expectations of management of Crombie about Crombie's future results, performance, achievements, prospects and opportunities. Wherever possible, words such as "continue", "may", "will", "estimate", "anticipate", "believe", "expect", "intend" and similar expressions have been used to identify these forward-looking statements, and include statements regarding: and the expected timing for closing the Transaction and Empire's expected ownership of the REIT following the closing of the Offering and the Transaction. These statements reflect current beliefs and are based on information currently available to management of Crombie, and include, without limitation, statements regarding the expected use of proceeds of the Offering. Forward-looking statements necessarily involve known and unknown risks and uncertainties.
A number of factors, including the risk that the Transaction does not close as expected, the availability of required regulatory approvals, and those risks discussed in the 2015 annual Management Discussion and Analysis under "Risk Management", could cause actual results, performance, achievements, prospects or opportunities to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and a reader should not place undue reliance on the forward-looking statements. There can be no assurance that the expectations of management of Crombie will prove to be correct.
SOURCE Crombie REIT