New Stock Arbitrage — CT Real Estate Investment Trust
CT Real Estate Investment Trust is an unincorporated real estate investment trust that invests in retail properties across Canada. The most significant portion of properties are located in Ontario, followed by Quebec and Western Canada. The trust generates the vast majority of revenue from leasing its properties to Canadian Tire Corporation, which operates the Canadian Tire retail stores. The trust’s portfolio primarily consists of properties anchored by a Canadian Tire retail store, in addition to retail properties not anchored by Canadian Tire, distribution centres, and mixed-use commercial property.
CT Real Estate Investment Trust and a subsidiary of Canadian Tire Corporation, Limited announced on September 10th that they have entered into an agreement with a syndicate of underwriters led by CIBC Capital Markets, RBC Capital Markets, and BMO Capital Markets pursuant to which the Underwriters will purchase, on a bought-deal basis, an aggregate of 16,846,000 units of CT REIT at a price of $14.25 per Unit. The Offering consists of a secondary offering of 10,530,000 units by CTC and a treasury offering of 6,316,000 units by CT REIT. On closing of the Offering, CTC and CT REIT will receive gross proceeds of $150 million and $90 million, respectively. The Offering is expected to close on or about September 19, 2019.
The net proceeds of the secondary offering will be used by CTC to support the continued investment in its business, including recently completed acquisitions, and for general corporate purposes. The net proceeds of the treasury offering will be used by CT REIT to fund the REIT’s investment program and to pay down amounts owing on its credit facility.