Northview REIT to be acquired by Starlight, KingSett for $36.25 per unit
Northview Apartment Real Estate Investment Trust (NPRUF) announced that it has entered into an arrangement agreement with affiliates of Starlight Group Property Holdings pursuant to which the Purchasers will acquire Northview, and the holders of Northview’s outstanding trust units will receive $36.25 per Unit in cash in a transaction valued at $4.8 billion including net debt.
Under the Arrangement Agreement, the Purchasers will acquire Northview, and the holders of Northview’s outstanding Units will receive $36.25 per Unit.
The Offer Price represents a total equity value of approximately $2.5 billion on a fully diluted basis and a total transaction value of approximately $4.8 billion including the assumption of net debt. The Transaction is not subject to a financing condition.
Unitholders will be able to elect to receive 100% of the Offer Price in the form of cash.
Alternatively, unitholders may elect to receive all or a portion of the Offer Price in units of a new, multi-residential fund that would own a geographically diverse portfolio of Northview properties located in six Canadian provinces and two territories.
The High Yield Fund will apply to list its units on a Canadian securities exchange concurrently with the close of the Transaction. The listing will be subject to the High Yield Fund fulfilling all of the initial listing requirements and conditions of the Exchange.
Further details with respect to the High Yield Fund will be provided in the management information circular to be mailed to Northview Unitholders. Elections to receive High Yield Fund units will be subject to proration.
All-Cash Elections will not be subject to proration. Unitholders not specifying an election will be deemed to have elected to receive the All-Cash Consideration.
Pursuant to the Arrangement Agreement, Northview has an initial 30-day go-shop period, beginning on February 19, 2020 and ending on March 20, 2020, during which it is permitted to actively solicit, evaluate and enter into negotiations with third parties that express an interest in acquiring Northview. Northview has the option to extend the Go-Shop Period by up to 30 days, in certain circumstances.
Mr. Daniel Drimmer, Chief Executive Officer and President of Starlight, has committed to vote the Units he beneficially owns, controls or directs in favour of, or tender his Units into, any all-cash superior proposal received during the Go-Shop Period, subject to certain terms and conditions, pursuant to a voting and support agreement.
The Arrangement Agreement also provides a two-tier termination fee structure such that if Northview is successful in completing a transaction pursuant to a superior proposal received during the Go-Shop Period, there will be a termination fee payable to the Purchasers of $37.7 million.
If a transaction is completed pursuant to a superior proposal received following the expiry of the Go-Shop Period, the Purchasers will be entitled to a termination fee of $88.0 million.
The Purchasers will have the right to match any superior proposals received either during or after the Go-Shop Period. The Transaction is structured as a statutory plan of arrangement under the Alberta Business Corporations Act.
Completion of the Transaction requires approval of at least 66 2/3% of the votes cast by unitholders and holders of special voting units, as well as the approval by a simple majority of votes cast by disinterested unitholders and holders of special voting units, excluding Starlight, its affiliates and any other unitholders required to be excluded under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions.
The Transaction is also subject to approval of the Alberta Court of Queen’s Bench, regulatory approvals, consents and approvals from Canada Mortgage and Housing Corporation and certain of Northview’s lenders and the satisfaction of other customary closing conditions.
Northview expects to continue to pay a monthly distribution of $0.1358 per trust unit through closing of the Transaction. The Transaction is expected to close by Q3 of 2020.
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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.