Partners REIT going-private transaction with McCowan and Associates Ltd.

TORONTO, Oct. 10, 2019 (GLOBE NEWSWIRE) -- Partners Real Estate Investment Trust (the “REIT” or “Partners”) (TSX: PAR.UN) and McCowan and Associates Ltd. (“MAA”) today jointly announced that the REIT has entered into an arrangement agreement (the “Arrangement Agreement”) with MAA pursuant to which MAA will acquire all of the outstanding units of the REIT (each a “Unit”), except for approximately 9,229,704 Units (representing approximately 20.03% of the outstanding Units) owned by MAA and its affiliates, for a price of Cdn. $0.78 per Unit in cash (the “Transaction”).

Transaction Highlights:

  • Partners’ unitholders (the “Unitholders”), except for MAA and its affiliates, will receive Cdn. $0.78 per Unit in cash, representing a premium of 21.9% to the closing price of the Units on the TSX on October 9, 2019, the last trading day prior to the date of this announcement, and a premium of 28.5% to the 30 day volume-weighted average price per Unit on the TSX for the period ending October 9, 2019
  • The purchase of 100% of the equity of Partners represents a total enterprise value of approximately $102 million, including the assumption of existing indebtedness.
  • The board of trustees of Partners (the “Board”), acting on the unanimous recommendation of a committee of the Board comprised solely of independent trustees (the “Independent Committee”), has approved the transaction and recommends that Unitholders (other than MAA and its affiliates) vote in favour of the transaction.

Ian Ross, Chairman of the Board comments on the Transaction: “With the sale of our Western Canadian properties last year, and sale of our Quebec properties earlier this year, we are pleased to announce the sale of Partners. The Board believes that the all-cash Transaction provides a significant premium for our Unitholders and recommends that they vote in favour of the Transaction."

The Independent Committee, comprised of Grant Anthony and Colin Chapin, both of whom are independent trustees of the REIT, after receiving legal and financial advice, has unanimously recommended that the Board approve the Arrangement Agreement.  The Board, after receiving legal and financial advice and the recommendation of the Independent Committee, has unanimously (with interested trustees abstaining) determined that the Arrangement is in the best interest of the REIT and is fair to Unitholders (other than MAA and its affiliates) and recommends that Unitholders (other than MAA and its affiliates) vote in favour of the Arrangement at the special meeting of Unitholders to be called to approve the Transaction (the “Meeting”).

Fairness Opinions

The REIT retained BMO Capital Markets as financial advisor and the Independent Committee retained Blair Franklin Capital Markets Inc. as an independent financial advisor.  BMO Capital Markets and Blair Franklin Capital Markets Inc. each provided an opinion to the effect that, as of October 10, 2019, subject to the assumptions, limitations and qualifications contained therein, the consideration to be received by the Unitholders pursuant to the Transaction is fair from a financial point of view to the Unitholders, other than MAA and its affiliates. The fairness opinions will be included in the management information circular to be filed and mailed to Unitholders in connection with the approval of the Transaction at the Meeting.

Transaction Details

The Transaction will be implemented by way of a statutory plan of arrangement under the Business Corporations Act (Ontario). Completion of the Transaction, which is expected to occur in the fourth quarter of this year, is subject to customary conditions, including court approval, regulatory approval and approval of at least 66 2/3% of the votes cast by Unitholders at the Meeting and a simple majority of the votes cast by the REIT’s minority Unitholders at the Meeting, being all Unitholders other than MAA and its affiliates.

Significant Unitholders of the REIT (collectively, the “Locked-Up Unitholders”) have entered into support and voting agreements (the “Support Agreements”) with MAA pursuant to which the Locked-Up Unitholders have agreed, subject to the terms thereof, to vote their Units in favour of the Transaction.  The Locked-Up Unitholders hold, collectively, approximately 36.3% of the Units

Pursuant to the Arrangement Agreement, the REIT is subject to, among other things, customary representations, warranties and covenants, including customary non-solicitation covenants from the REIT. In certain circumstances where the Arrangement Agreement is terminated, including if the Independent Committee or the Board change its recommendation or the REIT terminates the Arrangement Agreement to enter into a Superior Proposal (as defined in the Arrangement Agreement), the REIT has agreed to pay MAA a termination fee of $1.4 million.

A termination fee of $2 million will be payable by MAA to the REIT in certain circumstances.  This termination fee is being held in escrow by the depository in Canada.

MAA entered into the Arrangement Agreement for the purpose of acquiring 100% of the outstanding Units on a fully diluted basis. Following completion of the Transaction, the REIT intends to apply to be de-listed from the TSX and to cease to be a reporting issuer in all provinces and territories of Canada.

A copy of the Arrangement Agreement, the management information circular, the Support Agreements and other related documents will be filed with the Canadian securities regulatory authorities and be available on SEDAR at

All dollar amounts in this press release are in Canadian dollars.


BMO Capital Markets is acting as financial advisor to the REIT and McCarthy Tétrault LLP is acting as legal counsel to the REIT in connection with the Transaction. Blair Franklin Capital Partners Inc. is acting as independent financial advisor to the Independent Committee and Blake, Cassels & Graydon LLP is acting as legal counsel to the Independent Committee in connection with the Transaction.  Bennett Jones LLP is acting as legal counsel to MAA.

About Partners REIT

Partners REIT is a real estate investment trust focused on the management of a portfolio of 12 retail and mixed-use community and neighbourhood shopping centres. These properties are located in both primary and secondary markets in Ontario and Manitoba, and comprise a total of approximately 0.6 million square feet of leasable space.

About McCowan and Associates Ltd.

MAA has been a successful real estate owner and developer for more than 40 years and currently owns, directly or indirectly, commercial properties in Ontario with more than 2.4 million square feet of gross leasable area.


Certain statements included in this press release constitute “forward-looking information” (also known as forward-looking statements) within the meaning of applicable securities laws, including, but not limited to, those identified by the expressions “expect”, “will”, “believe” and similar expressions to the extent they relate to the REIT.  Forward-looking information involves known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Some of the specific forward-looking statements in this press release include, but are not limited to, statements with respect to: the Transaction and the terms thereof; the expected date of completion of the Transaction; and the anticipated benefits to Unitholders. There can be no assurance that the proposed Transaction will be completed or that it will be completed on the terms and conditions contemplated in this press release. The proposed Transaction could be modified or terminated in accordance with its terms.

Forward-looking information is based on a number of key expectations and assumptions made by the REIT and MAA including, without limitation: the Transaction will be completed on the terms currently contemplated; the Transaction will be completed in accordance with the timing currently expected; all conditions to the completion to the Transaction will be satisfied or waived and the Arrangement Agreement will not be terminated prior to the completion of the Transaction; and assumptions and expectations related to premiums to the trading price of Units and returns to Unitholders. Although the forward-looking information contained in this press release is based on what the REIT’s and MAA’s management believes to be reasonable assumptions, the REIT and MAA cannot assure investors that actual results will be consistent with such information.

Forward-looking information involves significant risks and uncertainties and should not be read as guarantees of future performance or results as actual results may differ materially from those expressed or implied in such forward-looking information. Those risks and uncertainties include, among other things: the Transaction may not be completed on the terms, or in accordance with the timing, currently contemplated, or at all; the REIT has incurred expenses in connection with the Transaction and will be required to pay for certain of those expenses regardless of whether or not the Transaction is completed; and the REIT and MAA may not be successful in satisfying the conditions to the Transaction. Additional information about risks and uncertainties related to the REIT is contained in the REIT’s annual information form for the year ended December 31, 2018 and in the REIT’s management’s discussion and analysis of financial results dated August 7, 2019, both of which are available on SEDAR at

The forward-looking information contained herein represents the REIT’s and MAA’s expectations as of the date of this press release, and is subject to change after this date. Each of the REIT and MAA assume no obligation to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required by applicable law.

Contact Information for Partners REIT:

Partners REIT Investor Relations
1 (844) 474-9620 ext. 401

C. Ian Ross
Chairman of the Board and Interim Chief Executive Officer
(416) 855-3313 ext. 501

Derrick West, CPA (CA)
Chief Financial Officer and Corporate Secretary
(416) 855-3313 ext. 503

Contact Information for McCowan and Associates Ltd.:

Ron McCowan, President
McCowan and Associates Ltd.
158 Dunlop Street East, Unit 201
Barrie, ON M4M 1B1