NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
TORONTO, ON – Slate Office REIT (TSX: SOT.UN) (the “REIT”), an owner and operator of office real estate, announces today that the Scheme of Arrangement[1] in respect of the REIT’s Firm Offer[2] to acquire all of the issued and outstanding shares of Yew Grove REIT plc (an Irish-incorporated real estate investment trust that is dual-listed on Euronext Dublin (Ireland) and the AIM market of the London Stock Exchange) (“Yew Grove”), for cash consideration of €1.017 per share (the "Proposed Acquisition"), became effective today, 7 February 2022, thereby completing closing of the Proposed Acquisition.
The REIT has acquired a portfolio of 23 modern, fit-for-purpose properties underpinned by strong, credit-quality tenants concentrated in technology, life sciences and essential industries, which are driving strong demand for office space in the region. In addition to growing the REIT’s existing portfolio, the transaction significantly increases the REIT’s future acquisition pipeline of properties with similar metrics to the portfolio in the region.
Steve Hodgson, Chief Executive Officer of the REIT, said: “With the close of this transaction, we are further enhancing the quality, diversity and scale of our portfolio and establishing a strong platform for continued growth in a market with attractive investment fundamentals and economic tailwinds. Our team’s ability to source and execute this transaction at a substantial discount to replacement cost and with meaningful upside rent potential will continue to drive organic earnings growth and create long-term value for our unitholders. We look forward to onboarding the Yew Grove team and working closely together to pursue future investment opportunities in Ireland and beyond.”
The Proposed Acquisition was partially funded by the previously announced private placement of 1,183,800 units of the REIT (each, a "Unit") at a price of C$4.90 per Unit for gross proceeds of C$5.8 million (the “Private Placement”) to Slate Asset Management L.P., the proceeds of the sale of 11,225,000 subscription receipts of the REIT (the "Subscription Receipts") at a price of C$4.90 per Subscription Receipt for gross proceeds of approximately C$55.0 million and C$75.0 million aggregate principal amount of 5.50% extendible convertible unsecured subordinated debentures of the REIT (the "Debentures") which closed on November 19, 2021 (collectively, the “Offering”), as well as the issuance of an additional C$9.2 million aggregate principal amount of Debentures pursuant to the partial exercise of the Debenture over-allotment option granted by the REIT to the syndicate of underwriters in connection with the Offering, which closed on December 17, 2021.
Subscription Receipts, Debentures and Private Placement Units
Concurrent with the Scheme of Arrangement becoming effective and the closing of the Proposed Acquisition, the REIT has closed the Private Placement and the conversion of the Subscription Receipts and the issuance of Units in connection therewith, and the maturity date for the Debentures was automatically extended to December 31, 2026.
As a result of the completion of the Proposed Acquisition: (i) one Unit will be automatically issued in exchange for each Subscription Receipt (subject to customary anti‐dilution protection), without payment of additional consideration or further action by the holder thereof, (ii) an amount per Subscription Receipt equal to the amount per Unit of any cash distributions made by the REIT for which record dates have occurred during the period from and including the Offering closing to and including the date immediately preceding the date upon which Units are issued, less any applicable withholding tax, will become payable in respect of each Subscription Receipt, and (iii) the net proceeds from the sale of the Subscription Receipts has been released from escrow to the REIT. Trading in the Subscription Receipts on the Toronto Stock Exchange will be halted, and the Subscription Receipts are expected to be delisted and the Units issued in exchange for the Subscription Receipts will immediately commence trading on the Toronto Stock Exchange.
About Slate Office REIT (TSX: SOT.UN)
Slate Office REIT is an owner and operator of office real estate. The REIT owns interests in and operates a portfolio of 55 strategic and well-located real estate assets across major population centres in North America and Europe. A majority of the REIT’s portfolio is comprised of government or high-quality credit tenants. The REIT acquires quality assets at a discount to replacement cost and creates value for unitholders by applying hands-on asset management strategies to grow rental revenue, extend lease term and increase occupancy. Visit slateofficereit.com to learn more.
About Slate Asset Management
Slate Asset Management is a global alternative investment platform focused on real estate. We focus on fundamentals with the objective of creating long-term value for our investors and partners. Slate’s platform spans a range of investment strategies, including opportunistic, value add, core plus and debt investments. We are supported by exceptional people and flexible capital, which enables us to originate and execute on a wide range of compelling investment opportunities. Visit slateam.com to learn more.
Statements required by the Irish Takeover Rules
The trustees of the REIT accept responsibility for the information contained in this announcement. To the best of the knowledge and belief of the trustees of the REIT (who have taken all reasonable care to ensure that this is the case) the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information.
Forward-Looking Statements
Certain information herein constitutes “forward-looking information” as defined under Canadian securities laws which reflect management’s expectations regarding objectives, plans, goals, strategies, future growth, results of operations, performance, business prospects and opportunities of the REIT. The words “plans”, “expects”, “does not expect”, “scheduled”, “estimates”, “intends”, “anticipates”, “does not anticipate”, “projects”, “believes”, or variations of such words and phrases or statements to the effect that certain actions, events or results “may”, “will”, “could”, “would”, “might”, “occur”, “be achieved”, or “continue” and similar expressions identify forward-looking statements. Such forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations.
Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable by management as of the date hereof, are inherently subject to significant business, economic and competitive uncertainties and contingencies. When relying on forward-looking statements to make decisions, the REIT cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not the times at or by which such performance or results will be achieved. A number of factors could cause actual results to differ, possibly materially, from the results discussed in the forward-looking statements. Additional information about risks and uncertainties is contained in the filings of the REIT with securities regulators.
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For Further Information
Investor Relations
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ir@slateam.com
[1] Scheme of Arrangement is defined herein as the scheme of arrangement under the Irish Companies Act 2014 to effect the Proposed Acquisition.
[2] Firm Offer is defined herein as a firm intention to make an offer under Rule 2.5 of the Irish Takeover Rules.