Tricon Shareholders Approve Proposed Take Private by Blackstone Real Estate

Rhea-AI Summary

Tricon Residential Inc. shareholders have approved a plan for Blackstone Real Estate Partners X to acquire all outstanding common shares for US$11.25 per share. The transaction is expected to be completed in the second quarter of this year, leading to the delisting of the Common Shares from NYSE and TSX.

Positive

• Shareholders voted to approve the acquisition of Tricon Residential Inc. by Blackstone Real Estate Partners X.
• The transaction involves Blackstone acquiring all outstanding common shares of Tricon for US$11.25 per share.
• Approximately 99.3% of Company Shareholders voted in favor of the special resolution approving the Arrangement.
• The Company intends to seek a final order from the Ontario Superior Court of Justice to approve the Arrangement on April 5, 2024.
• The completion of the Transaction is subject to certain customary closing conditions, including regulatory approval under the Investment Canada Act.
• Following completion, the Common Shares are expected to be delisted from NYSE and TSX, and the Company will cease to be a reporting issuer under Canadian securities laws.
• Registered Company Shareholders can submit their Common Shares to receive the consideration for the Transaction.
• Beneficial Company Shareholders holding Common Shares through intermediaries must contact their brokers to arrange for the surrender of their shares.

Negative

• None.

Insights

Financial Analyst

The acquisition of Tricon Residential Inc. by Blackstone represents a significant event in the real estate investment sector. From a financial perspective, the unanimous shareholder approval indicates strong confidence in the value proposition of the deal. The cash acquisition price of US$11.25 per share provides a clear exit strategy for Tricon shareholders, potentially reflecting a premium over the trading price prior to the acquisition announcement.

Investors and analysts will be keen to assess the premium paid, the strategic fit of Tricon within Blackstone's portfolio and the impact on Blackstone's financial leverage and earnings per share. The delisting of Tricon's shares post-transaction will consolidate Blackstone's position in the market, potentially leading to greater operational efficiencies and market influence. However, the removal of Tricon as a standalone investment option could reduce diversification choices for investors in the real estate sector.

Legal Expert

The transaction's adherence to the Business Corporations Act (Ontario) and the stipulations of MI 61-101 showcases the legal complexities of such corporate arrangements. The requirement for a two-thirds majority and the exclusion of certain shareholders in the voting process ensures the protection of minority shareholders, a critical aspect of corporate governance.

Post-transaction, the cessation of Tricon as a reporting issuer and the deregistration under the U.S. Exchange Act will relieve the company of certain disclosure and regulatory obligations, streamlining Blackstone's reporting processes. However, this also means a reduction in transparency for stakeholders accustomed to publicly available information. The legal intricacies of the Investment Canada Act will also play a role, as regulatory approval is necessary to finalize the deal, ensuring that it meets national interest criteria.

Market Research Analyst

The overwhelming shareholder support suggests that the market perceives the acquisition as beneficial for Tricon's stakeholders. The transaction reflects broader trends in the real estate sector, where consolidation is becoming increasingly common as companies seek scale and market presence. The deal could signal to the market that the real estate sector is ripe for further consolidation, potentially triggering similar transactions.

Long-term implications for the industry could include increased competition among fewer, larger players, which may impact pricing, service levels and innovation. The anticipated delisting from stock exchanges may also affect the liquidity and marketability of real estate investments in the public markets, shifting some investor focus towards private real estate investment opportunities.

TORONTO--(BUSINESS WIRE)-- Tricon Residential Inc. (NYSE: TCN, TSX: TCN) (“Tricon” or the “Company”) is pleased to announce that at its special meeting (“Meeting”) of shareholders of the Company (“Company Shareholders”) held earlier today, Company Shareholders voted to approve the previously announced statutory plan of arrangement under the Business Corporations Act (Ontario) (the “Arrangement”) pursuant to which Blackstone Real Estate Partners X, together with Blackstone Real Estate Income Trust, Inc. (and together with their respective affiliates, “Blackstone”) will acquire all of the outstanding common shares of Tricon (“Common Shares”) for US$11.25 per Common Share in cash (the “Transaction”).

The Arrangement required the approval of: (i) at least two-thirds (66 2/3%) of the votes cast by Company Shareholders present or represented by proxy at the Meeting, voting as a single class; and (ii) because the proposed Arrangement is a “business combination” subject to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”), a simple majority (more than 50%) of the votes cast by Company Shareholders present or represented by proxy at the Meeting, excluding the votes of Blackstone and other Company Shareholders whose votes were required to be excluded pursuant to MI 61-101.

Of the votes cast at the Meeting with respect to the Arrangement, a total of 208,391,666 Common Shares were voted in favour of the special resolution approving the Arrangement, representing approximately 99.3% of the votes cast by Company Shareholders. In addition, a total of 173,887,643 Common Shares were voted in favour of the special resolution approving the Arrangement, representing approximately 99.2% of the votes cast by Company Shareholders, excluding those Common Shares required to be excluded pursuant to MI 61-101. The Company’s full report of voting results will be filed under the Company’s issuer profile at www.sedarplus.ca and on Form 6-K at https://www.sec.gov.

Tricon intends to seek a final order from the Ontario Superior Court of Justice (Commercial list) to approve the Arrangement on April 5, 2024 (the “Final Order”). Completion of the Transaction remains subject to the satisfaction or waiver of certain customary closing conditions, including the receipt of the Final Order and regulatory approval under the Investment Canada Act. Subject to the satisfaction or waiver of all of the conditions to the Transaction, the Transaction is expected to be completed in the second quarter of this year. Following completion of the Transaction, it is anticipated that the Common Shares will be delisted from the New York Stock Exchange and the Toronto Stock Exchange and that the Company will apply to cease to be a reporting issuer under applicable Canadian securities laws and will deregister the Common Shares under the U.S. Securities Exchange Act of 1934, as amended (the “U.S. Exchange Act”).

Enclosed with the management information circular of the Company dated February 15, 2024 (the “Circular”) was a letter of transmittal explaining how registered Company Shareholders can submit their Common Shares in order to receive the consideration to which they are entitled in connection with the Transaction. Registered Company Shareholders who have questions on how to complete the letter of transmittal should direct their questions to the Company’s transfer agent and depositary, TSX Trust, at 1-866-600-5869 (toll-free within North America) or at 416-342-1091 (outside of North America) or by email at tsxtis@tmx.com. Beneficial Company Shareholders holding Common Shares that are registered in the name of an intermediary must contact their broker or other intermediary to submit their instructions with respect to the Arrangement and to arrange for the surrender of their Common Shares in order to receive the consideration to which they are entitled in connection with the Transaction.

About Tricon Residential Inc.

Tricon Residential Inc. (NYSE: TCN, TSX: TCN) is an owner, operator and developer of a growing portfolio of approximately 38,000 single-family rental homes in the U.S. Sun Belt and multi-family apartments in Toronto, Canada. Our commitment to enriching the lives of our employees, residents and local communities underpins Tricon’s culture and business philosophy. We provide high-quality rental housing options for families across the United States and in Toronto, Canada through our technology-enabled operating platform and dedicated on-the-ground operating teams. Our development programs are also delivering thousands of new rental homes and apartments as part of our commitment to help solve the housing supply shortage. At Tricon, we imagine a world where housing unlocks life’s potential. For more information, visit www.triconresidential.com.

Forward-Looking Information

Certain statements contained in this news release may constitute forward-looking information within the meaning of applicable Canadian securities laws. Forward-looking information is often, but not always, identified by the use of words such as "anticipate", "plan", "expect", "may", "will", "intend", "should", and similar expressions. This information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. Forward-looking information in this news release includes, but is not limited to, the following: statements with respect to the Final Order, the expected completion of the Transaction and the timing thereof, the satisfaction of the conditions to the closing of the Transaction including receipt of required court and regulatory approvals, the delisting of the Common Shares from the New York Stock Exchange and the Toronto Stock Exchange, the Company’s application to cease to be a reporting issuer under applicable Canadian securities laws and the Company’s deregistration of the Common Shares under the U.S. Exchange Act.

Such forward-looking information and statements involve risks and uncertainties and are based on management’s current expectations, intentions and assumptions, including expectations and assumptions concerning receipt of required approvals and the satisfaction of other conditions to the completion of the Transaction. There can be no assurance that the proposed Transaction will be completed, or that it will be completed on the terms and conditions contemplated. Accordingly, although the Company believes that the expectations and assumptions on which the forward-looking information contained in this news release is based are reasonable, undue reliance should not be placed on the forward-looking information because Tricon can give no assurance that it will prove to be correct. Since forward-looking information addresses future events and conditions, by its very nature it involves inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to: the failure to obtain necessary approvals or satisfy (or obtain a waiver of) the conditions to closing the Transaction; the occurrence of any event, change or other circumstance that could give rise to the termination of the Transaction; material adverse changes in the business or affairs of Tricon; the parties’ ability to obtain requisite court and regulatory approvals; either party’s failure to consummate the Transaction when required or on the terms as originally negotiated; risks related to the disruption of management time from ongoing business operations due to the Transaction and possible difficulties in maintaining customer, supplier, key personnel and other strategic relationships; potential litigation relating to the Transaction, including the effects of any outcomes related thereto; the possibility of unexpected costs and liabilities related to the Transaction; competitive factors in the industries in which Tricon operates; interest rates, currency exchange rates, prevailing economic conditions; and other factors, many of which are beyond the control of Tricon. Additional factors and risks which may affect Tricon, its business and the achievement of the forward-looking statements contained herein are described in the “Risk Factors” section of the Circular as well as Tricon’s annual information form and Tricon’s management’s and discussion and analysis for the year ended December 31, 2023, and in the other subsequent reports filed on the SEDAR+ profile of Tricon at www.sedarplus.ca and Tricon’s filings with the SEC, including the Schedule 13E-3, which includes the Circular, on www.sec.gov. The forward-looking information contained in this news release represents Tricon’s expectations as of the date hereof, and is subject to change after such date. Tricon disclaims any intention or obligation to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240328111357/en/

For further information, please contact:

Wissam Francis

EVP & Chief Financial Officer

Email: IR@triconresidential.com

Wojtek Nowak

Managing Director, Capital Markets

Tricon Media Contact:

Tara Tucker

Senior Vice President, Corporate and Public Affairs

Email: mediarelations@triconresidential.com

Source: Tricon Residential Inc.

FAQ

What is the price per share offered by Blackstone Real Estate Partners X to acquire Tricon Residential Inc.?

Blackstone Real Estate Partners X will acquire all outstanding common shares of Tricon for US$11.25 per share.

What percentage of Company Shareholders voted in favor of the special resolution approving the Arrangement?

Approximately 99.3% of Company Shareholders voted in favor of the special resolution approving the Arrangement.

When is Tricon Residential Inc. expected to seek a final order from the Ontario Superior Court of Justice to approve the Arrangement?

Tricon Residential Inc. is expected to seek a final order from the Ontario Superior Court of Justice to approve the Arrangement on April 5, 2024.

What are the conditions required for the completion of the Transaction?

The completion of the Transaction is subject to certain customary closing conditions, including regulatory approval under the Investment Canada Act.

What will happen to the Common Shares after the completion of the Transaction?

Following completion, the Common Shares are expected to be delisted from NYSE and TSX, and the Company will cease to be a reporting issuer under Canadian securities laws.