Agellan enters settlement deal with dissident Sandpiper
AGELLAN COMMERCIAL Real Estate Investment Trust has entered into a strategic settlement agreement with ELAD Canada Inc. and Sandpiper Group.
The agreement is unanimously supported by the board of trustees of the REIT with Rafael Lazer, current trustee and chief executive officer of ELAD, having declared his interest and abstained. As part of the agreement, Sandpiper has withdrawn its previously announced unitholder meeting requisition, and each of ELAD and Sandpiper has agreed with the REIT to vote in favour of the newly reconstituted board at the annual meeting of unitholders to be held in 2018.
“We are pleased to have reached an agreement with ELAD and Sandpiper that we believe represents a positive outcome for all unitholders and avoids a costly proxy contest,” said Frank Camenzuli, chief executive officer of Agellan. “We look forward to continuing to execute on our strategic plan and growing Agellan into a dominant pure play industrial REIT for years to come,” added Mr. Camenzuli.
“We are excited that ELAD, together with Sandpiper, will get to play a more meaningful role in the future of Agellan and that the REIT’s management team led by our CEO, Frank Camenzuli, remains an important partner of the REIT,” said Mr. Lazer.
“We are appreciative that Agellan’s board worked constructively with Sandpiper and ELAD and are confident that the reconstituted board is well positioned to support management in achieving the REIT’s full potential,” said Renzo Barazzuol, president and chief operating officer, Sandpiper.
Highlights of the agreement include:
• Asset management of Agellan has been internalized, and the purchase agreement terms have been amended to provide for a purchase price of up to $13-million. The purchase price consists of an upfront $10-million payment that was satisfied entirely with exchangeable Class B limited partnership units of a subsidiary of the REIT and up to $3-million of contingent cash payments based on the REIT achieving certain performance thresholds for calendar years 2018 and 2019. In addition, the REIT’s historical asset manager will now also be entitled to the 2017 incentive fee payment that had been previously waived as part of the original asset purchase agreement. Closing of the internalization occurred concurrently with the execution of the agreement.
• The board remains at seven members with the immediate addition of three, highly qualified individuals: Mr. Barazzuol, Dov Meyer and Aida Tammer. Richard Dansereau, Anthony Messina and Kelly Smith have vo lun t arily stepped down from the board to make way for the new trustees.
• Glen Ladouceur, the current chair of the audit committee, has become the new chairman of the board of the REIT.
New board composition The new board consists of the following trustees:
• Existing board members: Mr. Ladouceur, who has been appointed chairman of the board; Mr. Camenzuli; Dayna Gibbs; and Mr. Lazer;
• New board members: Mr. Barazzuol; Mr. Meyer; and Ms. Tammer.
Mr. Meyer represents an agreed-upon independent nominee by both ELAD and the REIT. Mr. Meyer is a well-respected real estate veteran who has considerable experience in the U.S. investment mar ket bot h as a principal and as a lender.
Mr. Barazzuol is currently Sandpiper’s president and COO and was formerly the chief financial officer for the Aquilini Investment Group (2008 to 2016, initially as chief financial officer of the real estate development group).
Ms. Tammer has 25 years of corporate governance, capital markets and real estate investment experience, having advised on numerous real estate investment trust initial public offerings and merger-and-acquisition transactions, debt and equity offerings, and property trades totalling over $30-billion.
The board is extremely pleased that it was able to avoid a costly and distracting proxy fight by reaching a resolution for the benefit of all unitholders. The REIT looks forward to updating unitholders in the near future on the continued execution of its strategic plan.
We seek Safe Harbor.
Karen Baxter condensed this news release (firstname.lastname@example.org).
Francis Xavier Camenzuli, Richard Dansereau, Dayna Gibbs, Glen Joseph Ladouceur, Rafael Lazer, Anthony J Messina, Kelly Lynne Smith
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