Plazacorp acquires KeyREIT; Funds acquisition with Bridge Facility from RBC

Plazacorp Retail Properties Ltd. (Plazacorp), a mutual fund corporation, successfully concluded its take-over bid for KEYreit, taking up approximately 88.5 per cent of the outstanding units of KEYreit for an unadjusted price of $8.35 per unit. Plazacorp's offer was subject to a maximum aggregate cash amount of approximately $62.1 million or 1.7041 Plazacorp shares per unit, or any combination thereof, subject to proration. Plazacorp subsequently completed a second step transaction to acquire the remaining units of KEYreit on June 26, 2013.

The total value of the acquisition was approximately $325 million, including the assumption of debt. Plazacorp funded the cash required for the purchase of the units and to cover related fees and expenses with a one-year secured credit facility from the Royal Bank of Canada (RBC).

Plazacorp's bid was made pursuant to a support agreement between Plazacorp and KEYreit and a lock-up agreement with John Bitove, the former chief executive officer of KEYreit, held approximately 11.36 per cent of KEYreit's units on a fully-diluted basis. Plazacorp and KEYreit entered into the support agreement following an unsolicited offer made by Huntingdon Capital Corp. The Huntingdon offer was initially a partial all-cash offer for up to 45 per cent of the issued and outstanding units at a price of $7 per unit and was the subject of hearings at both the British Columbia and Ontario Securities Commissions. Huntingdon ultimately subsequently amended its offer several times so that it was ultimately an offer to acquire all of the outstanding units at $8 per unit in cash or a combination of cash and shares of Huntingdon. Huntingdon announced that it was allowing its offer to expire on April 11, 2013, following the formal launch of Plazacorp's offer earlier that week.

Following its acquisition of KEYreit, Plazacorp's portfolio includes interests in 347 properties totaling approximately 6.4 million square feet across Canada and additional lands held for development. Plazacorp's properties include a mix of strip plazas, stand-alone small box retail outlets and enclosed shopping centres, anchored by approximately 90 per cent national tenants. Plazacorp graduated to the Toronto Stock Exchange from the TSX Venture Exchange following its acquisition of KEYreit.

Plazacorp was represented in-house by James Petrie, vice president and general counsel, and Kimberly Strange, secretary and corporate counsel; and by its external counsel, Davies Ward Phillips & Vineberg LLP, with a team that included Jim Reid, Brooke Jamison and Chris Figel (corporate and securities); Fred Purkey and Brian Bloom (taxation); Elisa Kearney and Erika Douglas (competition); and Derek Vesey and Natalie Renner (banking) and Gabriella Lombardi (real estate).

KEYreit was represented by Dee Rajpal and Paul Rakowski of Stikeman Elliott LLP. KEYreit's special committee was represented by Norton Rose Fulbright Canada LLP with a team made up of Ava Yaskiel, Paul Fitzgerald, Walied Soliman, Evelyn Li, Hoori Chitilian and Matt Bernardo (corporate and securities); Kevin Akhurst (competition); and Orestes Pasparakis, Robert Frank, Vasuda Sinha and Andrew McComb (litigation).

RBC was represented by Blake, Cassels & Graydon LLP with a team including Michael Matheson, Daniel Kofman and Mat-thew Trim.
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