PrefBlog

In December, 2012, Dundee Corporation announced:

that its Board of Directors has approved, in principle, to proceed with a corporate restructuring, through a tax efficient plan of arrangement (the “Arrangement”) that will distribute to shareholders of the Corporation a 50% interest in Dundee Realty Corporation, the Corporation’s 70% owned real estate subsidiary. The Corporation itself will retain a 20% interest in Dundee Realty, with Mr. Michael Cooper, the President and Chief Executive Officer of Dundee Realty, retaining the remaining 30%.

The Corporation expects that the Arrangement, when completed, will result in the establishment of a new public company, with a capital structure that emulates that of Dundee Corporation. The Arrangement will be subject to regulatory, court and shareholder approvals, as well as the listing of the distributed company’s shares on the Toronto Stock Exchange.

The Arrangement as currently proposed provides that the share structure of the new company to be distributed will emulate that of Dundee Corporation, with the Class A and Class B shares as well as the First Preference Shares, Series 1 receiving their proportionate interest in the distributed company.

Upon completion of the Arrangement, Mr. Ned Goodman, President and Chief Executive Officer of the Corporation, will continue as Chairman of the Board of Directors, and Mr. Michael Cooper will continue as President and Chief Executive Officer. Mr. Goodman and Mr. Cooper will provide our shareholders with continuity in the quality of management of our real estate operations that they have experienced to date.

Dundee then announced on April 15:

that it has entered into an arrangement agreement (the “Arrangement Agreement”) with DREAM Limited, Dundee Realty Corporation (“Dundee Realty”) and Sweet Dream Corp., the 30% shareholder of Dundee Realty owned by Michael Cooper, in connection with the previously announced (December 14, 2012) corporate restructuring, through a tax efficient plan of arrangement (the “Arrangement”).

The Arrangement will result in the establishment of a new public real estate company, DREAM Limited, to which the Corporation will, directly or indirectly, transfer its 70% interest in the common shares and Class C preference shares (collectively, the “DRC Shares”) of Dundee Realty, the Corporation’s 70% owned real estate subsidiary. Following the completion of the Arrangement, Dundee is expected to own, directly or indirectly, Class A Subordinate Voting Shares of DREAM Limited representing approximately 28.57% of the total number of outstanding Class A Subordinate Voting and Class B Common Shares of DREAM Limited, and thereby retain an approximate indirect 20% interest in the DRC Shares. Pursuant to the Arrangement, holders of Dundee’s Class A Subordinate Voting Shares and Class B Common Shares will receive, directly or indirectly, their proportionate interest based on their Dundee share ownership in DREAM Limited. Holders of Dundee’s First Preference Shares, Series 1 will receive, for each share held, (i) a new Dundee preference share with an expected liquidation amount of $18.67 and an annual dividend of 5%, and (ii) a preference share of DREAM Limited with an expected liquidation amount of $6.33 and an increased annual dividend of 5.5%. Holders of the Corporation’s First Preference Shares, Series 2 are not participating in the Arrangement.

Dundee has now announced:

that it has agreed to amend the arrangement agreement (the “Arrangement Agreement”) with DREAM Limited, Dundee Realty Corporation (“Dundee Realty”) and Sweet Dream Corp., the 30% shareholder of Dundee Realty owned by Michael Cooper, in connection with the previously announced plan of arrangement (the “Arrangement”).

Following discussions with holders of Dundee’s First Preference Shares, Series 1, Dundee determined to revise the terms of the preference shares of DREAM Limited to reflect market terms for the security. Under the Arrangement, as amended, holders of Dundee’s First Preference Shares, Series 1 will receive, for each share held, (i) a new Dundee preference share with an expected liquidation amount of approximately $18.67 and an annual dividend of 5%, as previously announced, and (ii) a preference share of DREAM Limited with an expected liquidation amount of approximately $6.33 and an increased
dividend of 7.0% (increased from 5.5% previously announced). In addition, the preference shares of DREAM Limited will be redeemable, at the option of the holder, at any time after December 31, 2013 until December 31, 2014 at 102% of the liquidation amount, at any time after December 31, 2014 until December 31, 2015 at 101% of the liquidation amount and at any time after December 31, 2015 at 100% of the liquidation amount.

All other terms of the Arrangement remain the same as disclosed in Dundee’s management information circular dated April 16, 2013 mailed to shareholders.

This entry was posted on Wednesday, May 15th, 2013 at 9:16 pm and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.