Loblaw REIT raises C$400 million in IPO; units open lower in debut

Fri Jul 5, 2013 10:28am EDT
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(Reuters) - Loblaw Cos Ltd (L.TO: Quote), Canada's largest food retailer, said its real estate investment trust raised C$400 million in an initial public offering.

Choice Properties Real Estate Investment Trust CHP_u.TO sold 40 million units at C$10.00 per unit. The units debuted below their offer price at C$9.95 on the Toronto Stock Exchange.

The units were the most traded on the exchange, with more than 2 million units changing hands by 1010 ET on Friday.

The REIT also raised C$600 million ($570.8 million) through issuance of senior debentures and completed a C$200 million offering to George Weston Ltd WN.TO, Loblaw's biggest shareholder.

Loblaw had said it planned to spin off real estate worth more than C$7 billion into a REIT and sell units of the trust through an initial public offering in July.

The company said on Friday it sold a portfolio of 425 properties indirectly to the REIT for about C$7 billion.

Choice Properties initially plans to make monthly cash distributions of C$0.054167 per unit.

($1 = 1.0511 Canadian dollars)

(Reporting by Bhaswati Mukhopadhyay in Bangalore)