VANCOUVER, April 5, 2018 /CNW/ - Pure Multi-Family REIT LP
("Pure Multi-Family" or the "REIT") (TSXV: RUF.U, RUF.UN, RUF.DB.U;
OTCQX: PMULF) today announced that the board of directors (the
"Board") as part of its review of strategic options has initiated a
formal process to explore the potential sale of the REIT. The
process will be overseen by the special committee of independent
directors (the "Special Committee").
The Board is and has always been committed to maximizing
unitholder value. The Special Committee and the Board have
thoroughly assessed the proposals from Electra America ("Electra")
and believe they undervalue Pure Multi-Family's high quality
portfolio.
Rationale for Rejecting the Electra Proposals
The REIT has communicated with Electra since its initial proposal and the
Board, on the recommendation of the Special Committee after
receiving advice from its financial and legal advisors, determined
that it was in the best interest of unitholders to reject the
proposals. In making its determination, the Board concluded: (i)
the proposals do not fully value Pure Multi-Family's highly
attractive portfolio, (ii) that many other highly credible parties
are capable of paying a higher value than the proposals, and (iii)
Electra's proposals are highly
conditional and require a 30-day exclusivity period. Electra's proposals also provided that they
would be immediately withdrawn in the event the REIT publicly
disclosed their existence.
Market Supportive of Pure Multi-Family
Research analysts widely support Pure Multi-Family's decision to
reject Electra's proposals,
highlighting they do not fully reflect the value inherent in the
REIT's high quality portfolio. We have included below several
quotes from research analysts following Electra's proposals:
"In our view, Pure Multi could garner substantial interest from
other strategic bidders due to: 1) the digestible size of Pure
Multi's platform; 2) its attractive exposure to growing US Sunbelt
apartment markets such as Dallas
Fort-Worth, Texas; and 3) the high-quality nature of its
multifamily portfolio (average age: ~10 years). If consummated, we
believe Pure Multi could achieve a takeover offer price of
$8.00/unit or more, implying a cap
rate of 5.0% or lower." – Industrial Alliance (04/04/18)
"We believe the offer price represents a good opening bid…Our
outlook for RUF is constructive given its fully internalized
platform, Class "A" assets, insider ownership (~4%) and the
economic tailwinds from some of the strongest growth markets in the
U.S. Hence, we believe there should be room to improve the bid to
more fully reflect RUF's valuable platform, a portfolio premium and
renewed operating momentum." – RBC (04/03/18)
"Because this is an all-cash bid at a reasonable premium to both
the market price and to NAV, investors have good reason to
seriously consider the proposal. However, in our view, RUF is worth
more." – NBF (04/04/18)
"In our view, this bid is most likely not the 'best price' and
we suspect Electra would raise the
bid to acquire Pure's portfolio. Pure Multi-Family has assembled a
high-quality portfolio of rental apartment properties in strong
markets in the US, and we believe that there would be significant
interest in acquiring the portfolio." – Canaccord Genuity
(04/03/18)
Scotiabank and Farris Vaughan
Wills & Murphy LLP are acting as financial and legal
advisors to the Special Committee. There is no guarantee that the
strategic review process will result in a transaction.
About Pure Multi-Family REIT LP
Pure Multi-Family is a Canadian based, publically traded vehicle
which offers investors exclusive exposure to attractive,
institutional quality U.S. multi-family real estate assets.
Additional information about Pure Multi-Family is available at
puremultifamily.com and sedar.com.
Forward-Looking Information:
Certain statements in this news release may constitute
"forward-looking information" within the meaning of applicable
securities laws. Forward-looking information involves known and
unknown risks, uncertainties and other factors, and it may cause
actual results, performance or achievements or industry results, to
be materially different from any future results, performance or
achievements or industry results expressed or implied by such
forward-looking information. Forward-looking information generally
can be identified by the use of terms and phrases such as
"anticipate", "believe", "could", "estimate", "expect", "feel",
"intend", "may", "plan", "predict", "project", "subject to",
"will", "would", and similar terms and phrases, including
references to assumptions. Some of the specific
forward-looking information referred to in this news release
includes, but is not limited to, a statement that the process
will be overseen by the Special Committee.
The forward-looking information contained in this news release
are based on certain key expectations and assumptions made by Pure
Multi-Family, including: the existence of many other highly
credible parties capable of paying a higher value than Electra's current proposals; those assumptions
made by research analysts contained in this news release; and
reasonably stable economies in the markets in which Pure
Multi-Family operates.
Although Pure Multi-Family believes that the expectations and
assumptions on which the forward-looking information are based are
reasonable, undue reliance should not be placed on the
forward-looking information because Pure Multi-Family can give no
assurance that they will prove to be correct. Since forward-looking
information addresses future events and conditions, by their very
nature they involve inherent risks and uncertainties. Actual
results could differ materially from those currently anticipated
due to a number of factors and risks. These include, without
limitation, the risk that the strategic review process may not
result in a transaction and those factors that can be found under
"Risk Factors" in Pure Multi-Family's Annual Information Form dated
March 21, 2018 and under "Risks and
Uncertainties" in Pure Multi-Family's Management's Discussion and
Analysis dated March 7, 2018, both of
which are available on SEDAR at sedar.com.
The forward-looking information contained in this news release
represent Pure Multi-Family's expectations as of the date hereof,
and are subject to change after such date. Pure Multi-Family
disclaims any intention or obligation to update or revise any
forward-looking information except as required by law.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES
PROVIDER (as that term is defined in policies of the TSX Venture
Exchange) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY
OF THIS RELEASE.
SOURCE Pure Multi-Family REIT LP