On July 21, 2011, TransGlobe Apartment Real Estate Investment Trust (the REIT) (TSX: TGA.UN) announced that it entered into agreements to internalize the asset and property management functions of the REIT and to indirectly acquire a portfolio of 57 real estate properties for approximately C$740 million. The portfolio comprises 94 buildings, three townhouse complexes and one commercial building that contain approximately 7,500 residential suites. The acquisition is a related party transaction under applicable Canadian securities laws and is subject to "majority of the minority" approval of holders of REIT units.
In order to finance the cash component of the purchase price of the acquisition and acquisition costs, the REIT sold, on a bought-deal basis on July 29, 2011, approximately C$194 million of subscription receipts (the subscription receipts) at a price of C$11.25 per subscription receipt and C$50 million of 5.40% extendible convertible unsecured subordinated debentures to a syndicate of underwriters co-led by CIBC World Markets Inc. and TD Securities Inc., and including RBC Dominion Securities Inc., Scotia Capital Inc., BMO Nesbitt Burns Inc., Desjardins Securities Inc., Dundee Securities Ltd., GMP Securities L.P. and National Bank Financial Inc. The subscription receipts issued on July 29, 2011 included 1,693,124 subscription receipts that were issued pursuant to the over-allotment option which was granted by the REIT to the underwriters to purchase such subscription receipts at the same offering price.
Closing of the management internalization, acquisition and exchange of the subscription receipts for REIT units on a one-for-one basis is scheduled to occur on September 1, 2011, subject to unitholder approval of the acquisition at the special meeting scheduled to be held August 31, 2011 and other customary conditions.
TransGlobe Apartment REIT, headquartered in Mississauga, Ontario, is an unincorporated, open-ended real estate investment trust. The REIT was formed to own multi-suite residential rental properties across Canada.
Further information is found on Canada Newswire's website.