Boardwalk Real Estate Investment Trust recently revealed that The Toronto Stock Exchange has accepted its notice of intention to renew its normal course issuer bid, and that it has launched a contest that gives its tenants a chance to own its trust units.
Boardwalk has 46.09 million issued and outstanding trust units as of June 28, 2017. The public float of trust units of Boardwalk is 37.12 million.
The Bid allows Boardwalk to purchase up to 3.71 million trust units, representing 10% of its “public float” of trust units. The average daily trading volume for the six calendar months prior to the date hereof was 143,638 trust units (25% being 35,909 trust units, which shall be the daily purchase limit under the Bid).
According to a prepared statement, the bid started on July 4, 2017 and will terminate on July 3, 2018, or such earlier time as the Bid is complete. Purchases of trust units pursuant to this Bid will be effected through the facilities of the TSX and any alternative trading systems in Canada.
Boardwalk may also enter into an automatic purchase plan agreement with a broker to allow for the purchase of its trust units under the Bid at times when Boardwalk ordinarily would not be active in the market due to self-imposed trading blackout periods. Before entering into a blackout period, Boardwalk may, but will not be required to, instruct the designated broker to make purchases under the Bid in accordance with the terms of the APP.
The statement says that such purchases will be determined by the broker in its sole discretion based on parameters established by Boardwalk prior to the blackout period in accordance with TSX rules, applicable securities laws and the terms of the APP. The terms of the APP will be pre-cleared by the TSX before execution.
Outside of these pre-determined blackout periods, trust units will be purchased based on management’s discretion, in compliance with TSX rules and applicable securities laws.
Although Boardwalk has not purchased any trust units within the past 12 months, during the last 10 years, it has purchased 6.42 million trust units at a weighted average price of $42.34 per trust unit.
Boardwalk believes that the current and recent market prices of its trust units do not reflect their underlying value.
Boardwalk’s management is initiating this program. According to the statement, “it feels that, at current market prices, an investment in Boardwalk’s own high quality portfolio will deliver strong returns for unitholders and represents an effective use of its capital and steadily increasing cash flows. At the same time, Boardwalk plans to continue its property acquisition, development and capital improvement programs.”
Boardwalk is also initiating this program to carry out a customer loyalty program giving Boardwalk Resident Members a chance to become owners of trust units. To that end, all of Boardwalk’s Resident Members are eligible for a chance to win 100 trust units, for no other reason than choosing Boardwalk as their place to call home. Each month, one Resident Member will be selected to win 100 trust units, now through June 30, 2018.
Accordingly, Boardwalk will purchase all but 1,200 of the trust units for cancellation with the intention of increasing the proportionate interest of all remaining unit-holders. The 1,200 not purchased for cancellation will be used to award the prizes under the Contest.
Boardwalk REIT strives to be Canada’s friendliest landlord and currently owns and operates more than 200 communities with over 33,000 residential units totaling over 28 million net rentable square feet. Boardwalk’s principal objectives are to provide its Resident Members with the best quality communities and superior customer service, while providing trust unitholders with sustainable monthly cash distributions, and increase the value of its trust units through selective acquisitions, dispositions, development, and effective management of its residential multifamily communities.