The issuer bid circular (the “circular”) and other related documents including detailed instructions on how to participate in the Offer were mailed to holders of Equity LP Units or their designated brokers on
The Partnership would also like to take this opportunity to expand on the disclosure in the circular.
Reminder about Structure of the Offer
As outlined in the circular, the Offer provides two consideration alternatives to unitholders in exchange for their Equity LP Units: an Offer to receive (i) a mix of cash and preferred units; or (ii) the entire consideration in preferred units. Under either option, the preferred units have terms that are similar to the existing preferred units of the Partnership, but with a dividend rate that is based on current market and maturity in roughly equal tranches of 5, 10 and 15 years. The structure and terms of the Offer were determined by management, in consultation with the Partnership’s legal and tax advisors. Additional details on the structure and terms of the Offer, including its tax impact, can be found in the circular.
Additional Background to the Offer
In the ordinary course, management of the Partnership considers the Partnership’s capital structure and considers various capital transactions, including alternatives for providing liquidity to investors who are unable to achieve liquidity through the market. During the summer of 2021, management consulted with its advisors on alternatives and developed the structure and terms of the Offer. In mid-September, management called a meeting of the board of trustees of the general partner of the Partnership (the “Board”) to be held on
In accordance with the requirements of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (”MI 61-101”), the Board formed a committee of independent directors (the “Independent Committee”) consisting of
Management recommended the Offer for a number of reasons, including because the Partnership’s normal course issuer bid and the low trading volume in Equity LP Units on the TSXV provides limited opportunities for liquidity to investors. While the Partnership has undertaken bids for all cash in the past, the structure of the Offer was recommended by management because it offers investors a path to liquidity without the Partnership disposing of any of its assets to fund the issuer bid.
Supplemental disclosure on Review and Approval Process
As outlined in the circular, the Partnership had an initial Board meeting on
Members of the Independent Committee engaged with management on the rationale for the Offer and the nature and terms of the consideration being offered (including discussions with respect to the size, timing, financial impact and pricing of the Offer) and undertook further analysis and discussion via an in camera session. The Independent Committee considered the Partnership’s history of undertaking issuer bids to provide liquidity to security holders due to the lack of market liquidity of the securities of the Partnership. Further, the Independent Committee reviewed and discussed the scope, assumptions, valuation methods and conclusions of the Valuation with the Valuator prior to providing its approval of the Valuation.
The Valuator,
The preparation of the Valuation included a detailed review of the Offer and applicable documents, the financial position and operating results of the Partnership and a review of publicly available information which could impact the Offer. The Independent Committee received a written draft of the Valuation on
For further information, contact Investor Relations at 416-956-5142.
Note: This news release contains “forward-looking information” within the meaning of Canadian provincial securities laws and “forward-looking statements” within the meaning of applicable Canadian securities regulations or applicable
Although the Partnership believes that its anticipated future results, performance or achievements expressed or implied by the forward-looking statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information because they involve known and unknown risks, uncertainties and other factors, many of which are beyond its control, which may cause the actual results, performance or achievements of the Partnership to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements and information.
Factors that could cause actual results to differ materially from those contemplated or implied by forward-looking statements and information include, but are not limited to: the financial performance of Brookfield Asset Management Inc., the impact or unanticipated impact of general economic, political and market factors; the behavior of financial markets, including fluctuations in interest and foreign exchanges rates; global equity and capital markets and the availability of equity and debt financing and refinancing within these markets; strategic actions including dispositions; changes in accounting policies and methods used to report financial condition (including uncertainties associated with critical accounting assumptions and estimates); the effect of applying future accounting changes; business competition; operational and reputational risks; technological change; changes in government regulation and legislation; changes in tax laws, catastrophic events, such as earthquakes and hurricanes; the possible impact of international conflicts and other developments including terrorist acts; and other risks and factors detailed from time to time in the Partnership’s documents filed with the securities regulators in
The Partnership cautions that the foregoing list of important factors that may affect future results is not exhaustive. When relying on the Partnership’s forward-looking statements and information, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Except as required by law, the Partnership undertakes no obligation to publicly update or revise any forward-looking statements and information, whether written or oral, that may be as a result of new information, future events or otherwise.
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