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Dream Hard Asset Alternatives Trust Announces Intention to Commence Substantial Issuer Bid

TORONTO, Feb. 03, 2020 (GLOBE NEWSWIRE) -- DREAM HARD ASSET ALTERNATIVES TRUST (DRA.UN-TSX) (“Dream Alternatives”, the “Trust” or “we”) today announced its intention to commence a substantial issuer bid (the “Offer”) pursuant to which the Trust will offer to purchase up to 4,000,000 of its outstanding units (“Units”) at a purchase price of $8.25 per Unit in cash (the “Purchase Price”).    

Substantial Issuer Bid

On February 20, 2019, coincident with the release of its financial results for the year ended December 31, 2018, the Trust issued a news release outlining its strategic plan to enhance Unitholder value. The Trust’s strategic plan includes a commitment to repurchase up to $100 million of Units over three years.

On August 29, 2019, the Trust completed the purchase for cancellation of 4,000,000 Units at a purchase price of $8.00 per Unit for aggregate consideration of $32,000,000 pursuant to a substantial issuer bid.

The Trust intends to make two additional offers to Unitholders to repurchase Units in accordance with applicable securities laws, commencing with this Offer on or about February 7, 2020 and followed by a subsequent offer in 2020 for $30 to $35 million of Units at a price of at least $8.50, for a total buyback of $100 million Units. The exact number of Units that the Trust will offer to purchase and the timing of such purchases will be determined by the Trust at the time of launching of such offer, subject to the trustees’ obligations to act in the best interests of the Unitholders.

Consistent with this strategy, the Board of Trustees has authorized the commencement of the Offer. The Board of Trustees believes the Offer is a prudent use of our financial resources given our business profile and assets, the current market price of the Units and our cash requirements. The Offer provides Dream Alternatives with the opportunity to return up to $33 million of capital to Unitholders who elect to tender while at the same time increasing the proportionate Unit ownership of Unitholders who elect not to tender. The Offer is also intended to reduce unitholdings of less than 100 Units in order to reduce our ongoing costs.

The Purchase Price represents a 6.9% premium over the closing price of the Units on the TSX on February 3, 2020, the last full trading day prior to the Trust’s announcement of its intention to make this Offer.

Details of the Offer, including instructions for tendering Units to the Offer and the factors considered by the Board of Trustees in making its decision to approve the Offer, will be included in the formal offer to purchase and issuer bid circular and other related documents (the “Offer Documents”), which are expected to be mailed to unitholders, filed with applicable Canadian Securities Administrators and made available free of charge on or about February 7, 2020 on SEDAR at www.sedar.com and on the Trust’s website at www.dreamalternatives.ca. Unitholders should carefully read the Offer Documents prior to making a decision with respect to the Offer. The Offer will not be conditional on any minimum number of Units being tendered, but will be subject to various other conditions that are typical for a transaction of this nature. 

The Offer will expire at 5:00 p.m. Eastern time on the first business day following the 35th day after the mailing of the Offer Documents, unless terminated or extended by the Trust. If more than 4,000,000 Units are properly tendered to the Offer, the Trust will take-up and pay for the tendered Units on a pro-rata basis according to the number of Units tendered, except that “odd lot” tenders (of holders beneficially owning fewer than 100 Units) will not be subject to pro-ration. Assuming that 4,000,000 Units are purchased pursuant to the Offer, the aggregate purchase price pursuant to the Offer will be $33,000,000. The Trust intends to fund the Offer with a combination of cash on hand and existing credit facilities.

Our Board of Trustees has obtained an opinion from Desjardins Capital Markets to the effect that, based on and subject to the assumptions and limitations stated in such opinion, there is a liquid market for our Units as of February 3, 2020 and it is reasonable to conclude that, following the completion of the Offer in accordance with its terms, there will be a market for unitholders who do not tender to the Offer that is not materially less liquid than the market that existed at the time of the making of the Offer. A copy of the opinion of Desjardins Capital Markets will be included in the Offer Documents.

Our Board of Trustees has authorized the making of the Offer. However, our Board of Trustees is not making any recommendation to any Dream Alternatives unitholder as to whether to tender or refrain from tendering their Units under the Offer. Unitholders are strongly urged to consult their own financial, tax and legal advisors and to make their own decisions whether to tender or to refrain from tendering their Units to the Offer and, if so, how many Units to tender.

The Trust was authorized by the TSX to purchase up to 5,256,231 Units pursuant to a normal course issuer bid (the “NCIB”) that commenced on January 20, 2020 and expires on January 19, 2021. Since January 20, 2020, the Trust has not purchased any Units through the NCIB. There will be no purchases of Units under the NCIB until after the expiry of the Offer or date of termination of the Offer.

Any questions or requests for information may be directed to Computershare Trust Company of Canada, as the depositary for the Offer, at 1-800-564-6253 (Toll Free).

About Dream Hard Asset Alternatives Trust

Dream Alternatives provides investors with access to an exceptional portfolio of real estate development opportunities and alternative assets that would not be otherwise available in a public and fully transparent vehicle, managed by an experienced team with a successful track record in these areas. The objectives of Dream Alternatives are to build and maintain a growth-oriented portfolio, provide predictable cash distributions to unitholders on a tax efficient basis, and grow and reposition the portfolio to increase net asset value (NAV) per Unit over time. For more information, please visit: www.dreamalternatives.ca.

Forward looking information

This press release may contain forward-looking information within the meaning of applicable securities legislation, including statements regarding our strategic plan in general, our intention to undertake the Offer and the terms thereof, including the maximum number of Units we may purchase under the Offer, the expected expiration time of the Offer, the sources and availability of funding for the Offer, the market for the Units after completion of the Offer not being materially less liquid than the market that exists at the time of the making of the Offer, our expectations for future purchases of additional Units following the expiry of the Offer, and our unit buyback program (including the amounts to be deployed, the timing, price and size of any offers to Unitholders). Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Trust’s control, which could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, general and local economic and business conditions including foreign exchange rates, employment levels, mortgage and interest rates and regulations, the uncertainties around the timing and amount of future financings, consumer confidence, and inflation. Our objectives and forward-looking statements are based on certain assumptions, including that the general economy remains stable, interest rates remain stable, and conditions within the real estate market remain consistent. All forward-looking information in this press release speaks as of the date of this press release. The Trust does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise except as required by law. Additional information about these assumptions and risks and uncertainties is contained in the Trust’s filings with securities regulators, including its latest annual information form and management’s discussion and analysis. These filings are also available at Dream Alternatives’ website at www.dreamalternatives.ca.

For further information, please contact:

DREAM HARD ASSET ALTERNATIVES TRUST

Pauline Alimchandani                                                                        Derrick Lau
Chief Financial Officer                                                                       VP, Strategic Finance
(416) 365-5992                                                                                  (416) 365-2364
palimchandani@dream.ca                                                                 dlau@dream.ca