CT Real Estate Investment Trust and a Canadian Tire Corp. Ltd. subsidiary are selling 16,846,000 units of the Canadian REIT on a bought-deal basis at C$14.25 apiece.
The offering consists of a treasury offering of 6,316,000 units by the REIT and a secondary offering of 10,530,000 units by Canadian Tire for respective gross proceeds of C$90 million and C$150 million, respectively.
The offering also carries a 30-day overallotment option for the underwriters to acquire up to 2,457,000 additional units. If the option is fully exercised, the REIT and the retailer will receive gross proceeds of C$100 million and C$175 million, respectively.
The offering is slated to close on or about Sept. 19.
Canadian Tire will use the net proceeds from the secondary offering to support its ongoing investment in its business and for general corporate purposes. The REIT will use the net proceeds from the treasury offering to finance its investment program and to pay down outstanding amounts on its credit facility.
Following the transaction, Canadian Tire will own an effective interest of about 69.4% in the REIT, or 68.4% assuming the overallotment option is fully exercised. It plans to remain as the majority unit holder of the REIT over the long term.
The syndicate of underwriters for the offering is led by CIBC Capital Markets, RBC Capital Markets and BMO Capital Markets.
