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File photo of a Loblaws store in Montreal.

Ryan Remiorz/The Canadian Press

Shares in Loblaw spinoff Choice Properties Real Estate Investment Trust were slightly lower in initial trading on the Toronto Stock Exchange.

Shortly after markets opened Friday, the issue was trading at $9.90, down 10 cents.

Choice said it had completed its initial public offering of a minority stake of 40 million trust units at a price of $10 per unit for gross proceeds of $400-million.

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The offering was underwritten by a syndicate of underwriters with CIBC, RBC Dominion Securities and TD Securities Inc. acting as joint bookrunners.

The underwriters also have overallotment option for up to an additional six million units at the same price.

Currently, Loblaw holds an approximate 83.1 per cent effective interest in Choice Properties on a fully diluted basis.

It also holds all of the class B limited partnership units of the partnership, which are economically equivalent to and exchangeable for units. In addition, Loblaw holds all of the outstanding class C limited partnership units of the Partnership.

Loblaw's majority owner, George Weston Ltd., indirectly purchased 20 million units for $200-million, representing a 5.6 per cent interest.

The trust portfolio includes 415 retail properties, one office complex and nine warehouse properties totalling 35.3 million square feet of gross leasable area.

The aggregate purchase price of the properties, which represented about 75 per cent of Loblaw's real estate assets, was about $7-billion.

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Along with it IPO, Choice also said Friday that it had closed its offering of $600-million aggregate principal amount of senior unsecured debentures.

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