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Plazacorp Retail Properties Ltd. Acquisition of KEYreit March 25, 2013 Plazacorp and Transaction Overview Plazacorp Retail Properties Ltd. (“PLZ”) has reached an agreement to acquire KEYreit (“KRE”) (the “Transaction”) This acquisition further solidifies PLZ’s position as Eastern Canada’s leading property owner, developer and manager of unenclosed and enclosed retail real estate What sets Plazacorp apart: − Proven value-added development and operating capabilities with local market presence − Fully internalized management team and platform − Management and Directors own a significant (~40%) stake in the company − Unparalleled dividend growth record (11 dividend increases in 10 consecutive years) − Strong relationships with leading national and regional tenants Annual Dividend per Share (C$) − Plazacorp compound annualized shareholder returns since going public in July 1999 of ~17%* www.plaza.ca * As of March, 2013. Compound annualized rate of return includes capital appreciation and dividend income 2 Transaction Rationale Expected high single digit percentage AFFO per share accretion for PLZ Immediate Accretion Further reduces PLZ’s industry leading AFFO payout ratio based on PLZ’s current dividend of $0.225/share Ability to leverage PLZ’s fully internalized management platform to generate significant synergies (~$3 million on a run-rate basis) Significant Immediate Synergies Synergies include elimination of asset and property management fees to JBM Properties Inc. as well as public company G&A cost efficiencies Many of KRE’s leases are “quadruple net” Shoppers Drug Mart is the largest tenant for both PLZ and KRE Compatible Property Portfolio – Shoppers will remain as PLZ’s largest tenant on a pro forma basis, representing ~26% of PLZ’s min rent Weighted average lease terms: ~8 years (KRE) and ~7.3 years (PLZ) Enhanced Geographic Diversification Improved Profile for KRE Unitholders Taking PLZ Shares PLZ’s geographic concentration in Atlantic Canada changes from ~71% to ~60%, and Ontario changes from ~5% to ~12% (by GLA) Sustainable 2013E consensus AFFO payout ratio of ~80% & debt/GBV between ~57-58% Greater tenant diversification Internal management & in-house development/redevelopment expertise ~3.3x larger market cap relative to KRE*, and enhanced trading liquidity Access to lower cost capital to fuel growth www.plaza.ca * For illustrative purposes, PLZ’s market cap assumes convertible debentures are converted into shares and calculation is based on an illustrative PLZ share price of $4.90/share 3 Terms of the Transaction $8.00 total consideration per KRE unit Offer Price 29.4% premium to unaffected price of $6.18/unit* – 6.7% premium to Huntingdon’s $7.50/unit offer 50% cash / 50% shares for KRE units outstanding, subject to proration Form of Consideration Lock-up agreement with John Bitove, KRE’s CEO and largest unitholder 1.6326 PLZ shares for each KRE unit outstanding Tax-free rollover for unitholders electing for PLZ shares Transaction Support Deal Protection Unanimous support of both the PLZ and KRE Boards of Trustees KRE Trustees will tender their units to the bid $5 million break fee 5-business-day right-to-match 50% equity consideration financed with ~12.15 million PLZ shares Committed debt financing provided by RBC to fund cash consideration Financing – PLZ does not intend to issue any equity to fund the cash portion – Modest de-levering may occur after the transaction as a result of a small number of property sales Expected Timeline www.plaza.ca Mailing of Take-over Bid and Director’s Circular expected early to mid April, 2013 * Unaffected date of as close on January 28, 2013 (day prior to Huntingdon's announced intention to acquire 45% of KRE’s shares) 4 Strong Pro Forma Operating Metrics Plazacorp (Pre-Transaction) Plazacorp (Post-Transaction) 118 +193% 5.2M +23% 7.3 yrs +3% 7.5 yrs $607M +55% ~$930M ~$334M +20% properties sq. ft. of GLA weighted avg. lease term www.plaza.ca properties 6.4M sq. ft. of GLA weighted avg. lease term total assets total assets market cap* 346 ~$400M market cap* * For illustrative purposes, PLZ’s market cap assumes convertible debentures are converted into shares and calculation is based on an illustrative PLZ share price of $4.90/share 5 Enhanced Geographic Diversification Total GLA ('000s sq. ft.) PLZ KRE PF PLZ Province Properties Newfoundland 118 228 621 - 621 Nova Scotia 1,071 76 1,147 New Brunswick 1,557 17 1,573 P.E.I. 426 68 493 Québec 1,224 432 1,656 Ontario 262 485 746 Manitoba - 38 38 Saskatchewan - 5 5 Alberta - 114 114 British Columbia - 10 10 5,160 1,244 6,403 (1) Total (1) Totals may not add due to rounding 6 10 16 1 26 9 93 14 8 76 23 9 346 properties www.plaza.ca 10 provinces 2 6.4M sq. ft. of GLA 37 16 96.2%* occupancy * Pro forma occupancy based on KRE committed occupancy of 97.1% as disclosed in KRE’s 2012 Annual Report as Dec. 31, 2012 6 Compatibility of Major Tenants Pro Forma + = Current PLZ Top 10 Tenants KRE Top 10 Tenants % of Tenant Shopper's Drug Mart Min Rent 26% Pro Forma PLZ Top 10 Tenants % of Tenant Min Rent % of Tenant Shopper's Drug Mart 26% Shopper's Drug Mart Min Rent 26% Dollarama 7% Soul Foods (KFC) 19% Soul Foods (KFC) 7% Staples 4% Olympus Food (KFC) 12% Dollarama 4% Marks Work Warehouse 3% Pharma Plus 6% Olympus Food (KFC) 4% Best Buy / Future Shop 3% Hi-Flyer Food (KFC) 5% Staples 3% Reitmans 3% FMI Atlantic (KFC) 5% Marks Work Warehouse 2% Bulk Barn 3% Staples 3% Pharma Plus 2% Winners 3% Home Outfitters 3% Best Buy / Future Shop 2% Sobeys 2% Financial Institutions 2% Reitmans 2% Michaels 2% Prime Restaurants 1% Hi-Flyer Food (KFC) 2% 55% Total Top 10 tenants 81% Total Top 10 tenants 54% Total Top 10 tenants www.plaza.ca 7 Summary Financial Highlights Percentage AFFO per share accretion in high single digit range serves to further reduce PLZ’s current industry leading 2013E consensus AFFO payout ratio of ~80% Expect ~$3 million of G&A synergies on a run-rate basis − Elimination of asset and property management fees to JBM − Public company G&A cost efficiencies Manageable pro forma debt/GBV between ~57-58%* − Close to PLZ’s target debt/GBV ratio of 55% Given the higher coupon rates on many of KRE’s mortgages and its convertible debentures, it is expected that many favourable refinancing opportunities will exist over time www.plaza.ca * Including KRE’s convertible debentures, but excluding PLZ’s well-in-the-money convertible debentures 8 Contact Information for Questions More information available at: KEYreit’s website: www.keyreit.com SEDAR: www.sedar.com Contact us at: Michael Zakuta, CEO Floriana Cipollone, CFO (514) 457-0997, ext. #228 (416) 848-4583 Plazacorp Retail Properties Ltd. (TSX-V:PLZ) 527 Queen Street, Suite 200 Fredericton, NB E3B 1B8 Phone: (506) 451-1826 Fax: (506) 451-1802 Email: [email protected] Web Site: www.plaza.ca www.plaza.ca 9 Forward-Looking Disclaimer Certain statements made in this presentation are forward-looking and are subject to risks, uncertainties and assumptions concerning future conditions that may ultimately prove to be inaccurate and may cause actual results and events to be materially different than those predicted. www.plaza.ca 10