Closing Date of Spin-Off to occur on
December 31, 2021
TORONTO, Dec. 23, 2021 /CNW/ - H&R Real Estate
Investment Trust ("H&R" or "the REIT") (TSX: HR.UN) today
announced that the previously announced spin-off of its Primaris
properties including all of its enclosed malls to a new
stand-alone, publicly traded real estate investment trust
("Primaris REIT"), to be implemented by way of plan of arrangement
(the "Arrangement"), has received the final order of the Court of
Queen's Bench of Alberta approving
the Arrangement, as well as a tax ruling from the Canada Revenue
Agency.
As a result, the Arrangement will proceed to close as planned
after markets close on December 31,
2021. Pursuant to the Arrangement, there will be a 4:1
consolidation of Primaris REIT units, such that holders of H&R
units will ultimately receive one Series A unit of Primaris REIT
("Primaris REIT Units") for every four H&R units held.
Immediately after completion of the Arrangement, the previously
announced contribution to Primaris REIT of eight retail properties
by the Healthcare of Ontario Pension Plan ("HOOPP") is expected to
close such that by the end of December 31,
2021, H&R unitholders and HOOPP will directly own
approximately 74% and 26%, respectively, of Primaris REIT units
issued and outstanding.
H&R has received conditional approval from the Toronto Stock
Exchange (the "TSX") for the listing and posting for trading of the
Primaris REIT Units. Listing of the Primaris REIT Units is subject
to, among other things, satisfaction of the customary listing
conditions of the TSX. Subject to satisfaction of these and
other conditions, H&R anticipates the Primaris REIT Units will
begin trading on the TSX under the trading symbol "PMZ.UN" on or
about January 5, 2022.
H&R has been advised by the TSX that "due bill" trading will
apply in connection with closing of the Arrangement. With both a
record date and closing date of December 31,
2021, regular trading will apply to the units of H&R up
to the close of trading on December 29,
2021. Beginning at the commencement of trading on
December 30, 2021 through the close
of trading on January 4, 2022,
H&R unitholders who sell their H&R units will sell their
units together with the Primaris REIT Units to be received pursuant
to the Arrangement (referred to as a "due bill" entitlement),
allowing H&R units to carry the value of the entitlement to the
Primaris REIT Units until the Arrangement closes. In effect,
January 4, 2022 is the payable date
for the Primaris REIT Units that are being deposited with CDS
Clearing and Depository Services Inc. and is the last date when
H&R units trade with the above-noted attached "due bill"
entitlement representing an entitlement to the Primaris REIT Units
distributed pursuant to the Arrangement. "Ex-distribution" trading
(i.e., where H&R units trade without the Primaris REIT Units to
be distributed pursuant to the Arrangement) is expected to commence
at the opening of trading on January 5,
2022, and the units of H&R will resume regular trading
without any "due bill" entitlement, reflecting that the Primaris
REIT spin-off has been completed and that the Primaris REIT Units
will no longer trade together with the H&R units. Unitholders'
accounts are expected to be credited to evidence the Primaris REIT
Units received by unitholders pursuant to the Arrangement on
December 31, 2021 within several days
of closing. The due bill redemption date (i.e., the date when
holders of due bill entitlements are expected to settle their
entitlements) will be January 6,
2022.
Most H&R unitholders hold their H&R units through a bank
or brokerage firm. In such cases, the bank or brokerage firm would
be said to hold the units in "street name," and ownership would be
recorded on the bank's or brokerage firm's books. If an H&R
unitholder holds H&R units through a bank or brokerage firm,
the bank or brokerage firm will credit the unitholder's account for
the Primaris REIT Units that the unitholder is entitled to receive
in the Arrangement. If H&R unitholders have any questions
concerning the mechanics of having units held in "street name,"
they should contact their bank or brokerage firm.
In connection with the Arrangement, all registered H&R
unitholders holding physical unit certificates or units in
book-entry form with H&R's transfer agent will receive Primaris
REIT Unit certificates or confirmations of book-entry positions
following completion of the Arrangement.
H&R's previously announced regular cash distribution
$0.0575 per H&R unit, payable on
January 12, 2022 to unitholders of
record on December 31, 2021, and
special distribution of $0.73 per
H&R unit, payable in additional units ($0.63 per unit) and cash ($0.10 per unit) to all unitholders of record as
at December 31, 2021, will not be
subject to "due bill" trading, and will continue to be paid in the
ordinary course.
About H&R REIT
H&R REIT is one of Canada's
largest real estate investment trusts with total assets of
approximately $13.1 billion at
September 30, 2021. H&R REIT has
ownership interests in a North American portfolio of high-quality
office, retail, industrial and residential properties comprising
over 40 million square feet. H&R is currently undergoing a
five-year, strategic repositioning to transform into a simplified,
growth-oriented company focusing on multi-residential and
industrial properties to surface significant value for
unitholders.
About Primaris REIT
Primaris REIT will become Canada's only enclosed shopping centre focused
REIT, following its spin-off from H&R REIT and combination with
a portfolio of properties contributed by Healthcare of Ontario
Pension Plan (HOOPP) expected on or about December 31, 2021. Primaris REIT will own
interests in primarily enclosed shopping centres aggregating 11.4
million square feet and valued at approximately $3.2 billion at Primaris REIT's share. Primaris
REIT will be fully independent, with a differentiated low-leverage
financial profile and a fully internal, vertically integrated,
at-scale management platform.
Forward-looking Information
Certain statements in this news release contain forward-looking
statements within the meaning of applicable securities laws (also
known as forward-looking statements). These forward-looking
statements include, but are not limited to statements with respect
to the Arrangement, the expected timing of the Arrangement, the
listing and trading of Primaris REIT Units, the closing of the
transaction with HOOPP, the expected "due bill" trading of H&R
units, the square footage and value of Primaris REIT's portfolio
and other statements contained in this release that are not
historical facts. Such forward-looking statements reflect
H&R's current beliefs and are based on information currently
available to management. These statements are not guarantees of
future performance or events and are based on H&R's estimates
and assumptions that are subject to risks and uncertainties,
including those set forth in H&R's management information
circular dated November 5, 2021 and
in H&R's materials filed with the Canadian securities
regulatory authorities from time to time, which could cause the
actual results and performance of H&R to differ materially from
the forward-looking statements contained in this news release.
Although the forward-looking statements contained in this news
release are based upon what H&R believe are reasonable
assumptions, there can be no assurance that actual results will be
consistent with these forward-looking statements. There can be no
assurance that the proposed transaction will occur or that the
anticipated benefits will be realized. The proposed transaction
could be modified, restructured or terminated. All forward-looking
statements in this news release are qualified by these cautionary
statements. These forward-looking statements are made as of today
and H&R, except as required by applicable law, assumes no
obligation to update or revise them to reflect new information or
the occurrence of future events or circumstances.
SOURCE H&R Real Estate Investment Trust