Wednesday, January 10, 2018

Pure Industrial REIT to be Acquired

There may soon be one less REIT for investors to choose from as Pure Industrial REIT (TSX:AAR.UN) has entered into an agreement to be acquired by Blackstone Property Partners (NYSE:BX).  

The deal, worth $3.8 billion will see each unit acquired for $8.10.  This price represents a 21% premium to closing price of PIRET Units on the TSX on January 8, 2018, the last trading day prior to the announcement of the Transaction and a 27% premium to the current research consensus Net Asset Value estimate of $6.40 per Unit.

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.

Completion of the transaction is expected to occur in the second quarter of 2018 and is pending a vote by PIRET shareholders, court approval and regulatory approvals (Canadian Competition Act and Investment Canada Act).

Source: Pure Industrial Press Release on Newswire.ca

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