Press release from CNW Group
Crombie REIT announces preliminary short form prospectus for proposed $50 million financing and signing of a binding purchase agreement for $102 million property acquisition
Wednesday, July 14, 2010
STELLARTON, NS, July 14 /CNW/ - Crombie Real Estate Investment Trust ("Crombie") (TSX: CRR.UN) is pleased to announce that it has filed a preliminary short form prospectus in connection with its previously announced public offering of approximately $29.5 million of Units at a price of $11.05 per Unit. Crombie is also pleased to advise that it has now entered into a binding asset purchase agreement with Sobeys (a wholly owned subsidiary of Empire Company Limited ("Empire") (TSX: EMP.A)) for the previously announced $102 million portfolio acquisition of 11 retail properties (the "Portfolio"). The Portfolio totals approximately 499,353 square feet and consists of eight properties located in Western Canada, two in Ontario and one in Atlantic Canada. The Portfolio acquisition is subject to completion of customary due diligence and obtaining satisfactory mortgage financing with an anticipated closing on or about August 31, 2010.
ECL Developments Limited (a wholly owned subsidiary of Empire), in satisfaction of its pre-emptive right with respect to the public Unit offering, will subscribe for 1,855,000 Exchangeable LP Units at a price of $11.05 per unit concurrently with the closing of the public offering. The combined gross proceeds from the Unit and Exchangeable LP Unit issuance totals $50 million.
The underwriting syndicate will be co-led by CIBC World Markets Inc. and TD Securities Inc. and also includes Scotia Capital Inc., BMO Capital Markets, National Bank Financial Inc., Canaccord Genuity Corp., Macquarie Capital Markets Canada Ltd., Beacon Securities Ltd., Raymond James Ltd. and Jennings Capital Inc. The offering of Units is expected to close on or about August 4, 2010 and is not conditional upon completion of the acquisition of the Portfolio.
Crombie intends to use the net proceeds from this offering to fund in part the acquisition of the Portfolio, additional acquisitions to be completed later in 2010 and for general trust purposes.
Closing of the offering is subject to certain conditions, including, but not limited to, receipt of all necessary securities regulatory approvals (including the approval of the Toronto Stock Exchange.
A copy of the preliminary prospectus may be obtained in Canada from members of the underwriting syndicate.
The Units will be offered by way of a short form prospectus in all provinces of Canada. A preliminary short form prospectus relating to the offering has been filed with each of the provincial securities regulatory authorities in Canada. This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, any securities in any jurisdiction. The Units will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
Crombie is an open-ended real estate investment trust established under, and governed by, the laws of the Province of Ontario. The trust invests in income-producing retail, office and mixed-use properties in Canada, with a future growth strategy focused primarily on the acquisition of retail properties. Crombie currently owns a portfolio of 118 commercial properties in seven provinces, comprising approximately 11.5 million square feet of rentable space. More information about Crombie can be found at www.crombiereit.com.
This news release may contain 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. These statements include, without limitation, statements regarding the expected use of proceeds of the offering and the expected closing date of the offering, and reflect current beliefs and are based on information currently available to management of Crombie. Forward looking statements necessarily involve known and unknown risks and uncertainties. A number of factors, including those discussed in the Risk Management section of Crombie's fiscal 2009 management's discussion and analysis, and of Crombie's management's discussion and analysis for the quarter ended March 31, 2010, and in the "Risks" section of Crombie's annual information form in respect of the year ended December 31, 2009, 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.
Readers are cautioned that such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from these statements. Crombie can give no assurance that actual results will be consistent with these forward-looking statements.
Additional information relating to Crombie can be found on Crombie's web site at www.crombiereit.com or on the SEDAR web site for Canadian regulatory filings at www.sedar.com.
For further information: Mr. Glenn Hynes, C.A., Chief Financial Officer and Secretary, Crombie REIT, (902) 755-8100