This
Amendment No. 1 to Schedule 13D (“Amendment No. 1”) amends and supplements the
initial statement on Schedule 13D filed by RioCan Real Estate Investment Trust
and RioCan Holdings USA Inc. with the Securities and Exchange Commission on
November 5, 2009 (the “Initial Statement” and, together with this Amendment No.
1, the “Schedule 13D”), in connection with the acquisition of additional shares
of the Company by the Reporting Persons on February 8,
2010. Capitalized terms used in this Amendment No. 1 without being
defined herein have the meanings given to them in the Initial
Statement.
|
Item
2.
|
Identity
and Background
|
Item 2(c)
of the Schedule 13D is hereby amended and restated in its entirety as
follows:
(c) The
principal business of each of the Reporting Persons is owning and, in the case
of RioCan REIT, managing, retail real estate. RioCan REIT owns and manages
shopping centers in Canada, with ownership interests in a portfolio of 258
retail properties, including 12 under development, containing an aggregate of
over 60 million square feet. RioCan Holdings, a subsidiary of RioCan REIT formed
for the purpose of engaging in the transaction described in Item 4 below, will
own jointly with affiliates of the Company an initial portfolio of seven
grocery-anchored shopping centers in the northeastern United
States.
|
Item
3.
|
Source
and Amount of Funds or Other
Consideration
|
Item 3 of
the Schedule 13D is hereby amended and restated in its entirety as
follows:
The total
amount of funds required by the Reporting Persons to acquire the shares reported
in Item 5 was $48,249,996.00. All such funds were provided from working
capital.
The total
amount of the funds required by Donald MacKinnon to acquire the shares reported
in Item 5 was $27,630.00 (before commissions). All such funds were provided from
personal funds.
|
Item
4.
|
Purpose
of the Transaction
|
Item 4 of
the Schedule 13D is hereby amended and restated in its entirety as
follows:
The
Reporting Persons acquired the shares reported in Item 5 as part of a
transaction with the Company (as more fully described below, the “Transaction”),
including a joint venture, because the Transaction provides an opportunity for
RioCan REIT to enter the U.S. retail real estate market. Mr. MacKinnon acquired
the shares reported in Item 5 for investment purposes.
Securities
Purchase Agreement
Pursuant
to the Securities Purchase Agreement, dated October 26, 2009 (the “Securities
Purchase Agreement”), among the Company, Cedar Shopping Centers Partnership
L.P., a Delaware limited partnership, RioCan Holdings and RioCan REIT, RioCan
Holdings acquired, on October 30, 2009, 6,666,666 shares of Common Stock at a
price of $6.00 per share and a warrant to purchase 1,428,570 additional shares
of Common Stock (the “Equity Investment”). The warrant is exercisable at any
time up to two years following the closing of the Equity Investment at a price
of $7.00 per share. RioCan Holdings has agreed not to sell, assign, transfer or
otherwise dispose of the shares of Common
| CUSIP No.:
150602209 |
Page 5
of 9 Pages |
Stock or
the warrant for one year, subject to certain exceptions. Additionally, the
Company’s board of directors agreed to waive a prohibition contained in the
Company’s articles of incorporation with respect to any person owning more than
9.9% of the Common Stock in order to permit RioCan Holdings to acquire up to 16%
of the outstanding Common Stock.
RioCan
Holdings has agreed that for a period of three years after closing of the Equity
Investment, except as otherwise agreed, it will not without the prior consent of
the Company’s board of directors (a) acquire, directly or indirectly, any
additional securities of the Company, (b) directly or indirectly or through any
other person, solicit proxies with respect to securities under any circumstance
or become a “participant” in any “election contest” relating to the election of
directors of the Company (as such terms are used in Rule 14a-11 of Regulation
14A under the Act); provided, that RioCan Holdings may vote its shares in any
manner it deems appropriate; (c) deposit any securities in a voting trust, or
subject any securities to a voting or similar agreement; (d) directly or
indirectly or through or in conjunction with any other person, engage in a
tender or exchange offer for the Company’s securities made by any other person
or entity without the prior approval of the Company, or engage in any proxy
solicitation or any other activity with any other person or entity relating to
the Company without the prior approval of the Company; or (e) take any action
alone or in concert with any other person to acquire or change the control of
the Company or participate in any group that is seeking to obtain or take
control of the Company. Notwithstanding the foregoing, RioCan Holdings may
acquire additional shares of the Common Stock on the open market if its
ownership interest is diluted in connection with certain events such as the
issuance of securities in an acquisition, merger, joint venture or sale or
purchase of assets. Moreover, the three-year standstill period described above
shall no longer apply and RioCan Holdings may acquire additional shares of the
Common Stock in the event a public tender offer is made and the Company
announces (i) a recommended sale or merger transaction or (ii) a process to
solicit proposals to acquire or merge with the Company.
RioCan
Holdings also has, subject to certain exceptions, a pre-emptive right to
maintain its percentage ownership interest in the Company with respect to the
Company’s issuance of any additional shares of Common Stock, provided that
RioCan Holdings owns at least 9.9% of the Common Stock. Additionally, RioCan
Holdings has the right to nominate one member of RioCan REIT’s senior management
or its board of trustees to serve as a director on the Company’s board of
directors. Raghunath Davloor, RioCan’s Senior Vice President and
Chief Financial Officer, was appointed to the board of directors of the Company
at the closing of the Equity Investment as RioCan Holdings’ initial
nominee.
The
Securities Purchase Agreement may be amended, modified or waived by an
instrument in writing signed by each of the parties thereto
Pursuant
to the Guaranty given by RioCan REIT in favor of the Company and Cedar Shopping
Centers Partnership L.P., dated October 26, 2009 (the “Guaranty”), RioCan REIT
has guaranteed the performance of RioCan Holdings’ obligations under the
Securities Purchase Agreement.
Registration
Rights Agreement
Under the
Registration Rights Agreement, dated October 30, 2009, and as amended by the
Subsequent Purchase Agreement, between the Company and RioCan Holdings, the
Company agreed to register the shares of Common Stock acquired by RioCan
Holdings, including those under the warrant, within six months of February 5,
2010. The Company is responsible for the costs and expenses associated with such
registration.
| CUSIP No.:
150602209 |
Page 6
of 9 Pages |
The
Company will keep the registration statement and prospectus effective until the
earlier of (i) twenty-four months after the later of the effective date of the
registration statement and October 26, 2010, (ii) the date on which all such
registrable securities have been disposed of under such registration statement
and (iii) such time as all such registrable securities have been otherwise
transferred to holders who may trade such securities without restriction under
the Securities Act of 1933, as amended (the “Securities Act”), and the Company
has delivered a new certificate of ownership without a restrictive legend (the
earliest of such dates being the “Expiration Date”) or as otherwise reasonably
requested by the holders of such securities.
The
Company has the right to include shares of other holders of Common Stock in any
registration statement under the Registration Rights Agreement, provided that it
does not negatively impact such registration with respect to RioCan Holdings or
affiliates. Commencing on the Expiration Date and for three years thereafter, if
the Company (i) proposes to file a registration statement under the Securities
Act with respect to the an offering of equity securities by the Company for its
own account or for stockholders of the Company for their account other than a
registration statement on Forms S-8 or S-4 or any such equivalent then in effect
and the registration form to be used may be used for the registration of
registrable securities held by RioCan Holdings or its affiliates, the Company
shall provide RioCan Holdings or its affiliates with written notice that that
they may include their registrable securities therein or (ii) has then in effect
a registration statement under the Securities Act with respect to equity
securities of the Company (other than a registration statement on Forms S-8 or
S-4 or any such equivalent then in effect or the registration statement on Form
S-3 filed by the Company on November 17, 2008) and such registration statement
may be used for the registration of registrable securities held by RioCan
Holdings or it affiliates, then the Company shall register the sale of such
registrable securities as RioCan Holdings or affiliates may request, subject to
certain exceptions.
The
Registration Rights Agreement may be amended or modified, and its provisions may
be waived, with the consent of the Company and RioCan Holdings.
Agreement
Regarding Purchase of Partnership Interests
Pursuant
to the Agreement Regarding Purchase of Partnership Interests, dated October 26,
2009 (the “Partnership Interests Agreement”), between Cedar Shopping Centers
Partnership L.P. and RioCan Holdings, the parties thereto have agreed to form a
joint venture with respect to seven supermarket-anchored properties owned and
managed by the Company as of the date thereof. The Company will hold a 20%
interest in the joint venture and RioCan Holdings will acquire the remaining 80%
interest. The properties consist of supermarket-anchored shopping centers in
Connecticut, Massachusetts and Pennsylvania. Closing for all but two of the
properties are subject to receipt of lender consents to the transfer of
properties to the joint venture. Closings of the joint venture arrangements are
expected to be completed in the first quarter of 2010 (the first two such
closings occurred on December 10, 2009; the third such closing occurred on
February 4, 2010).
Additionally,
RioCan Holdings and the Company have agreed to enter into additional joint
ventures to be owned 80%/20% to acquire additional supermarket-anchored retail
properties, primarily in the northeastern United States during the next two
years. Related to the future acquisitions, the Company has granted to RioCan
Holdings a right of first refusal for two years in the same joint venture format
on primarily supermarket-anchored properties and other properties in excess of
50,000 square feet to be acquired by the Company in the states of New York, New
Jersey, Pennsylvania, Massachusetts, Connecticut, Maryland and Virginia. The
Company in return will have a first right of refusal on RioCan Holdings’ and its
affiliates’ opportunities to acquire income producing properties that are
located in the same states as above (subject to certain exceptions). The first
such additional joint-
| CUSIP No.:
150602209 |
Page 7
of 9 Pages |
venture
acquisition closed on January 26, 2010 for Town Square Plaza shopping center in
Reading, Pennsylvania.
In both
the existing and future joint ventures, the Company will provide property
management, leasing, construction management and financial management services
at standard rates. The Company will also be entitled to certain fees on
acquisitions, dispositions, financings and refinancings.
Except as
otherwise expressly set forth therein, the Partnership Interests Agreement may
be modified by an agreement in writing signed by all the parties thereto or
their respective successors in interest.
Subsequent
Purchase Agreement
In order
to maintain the Reporting Persons’ proportionate interest in the Company, on
February 8, 2010, RioCan Holdings acquired 1,250,000 additional shares of Common
Stock (the “Additional
Shares”) at a price of $6.60 per share, in response to a public offering
by the Company. The acquisition of the Additional Shares was pursuant
to that certain Agreement (the “Subsequent Purchase
Agreement”), dated February 5, 2010, between RioCan Holdings and the
Company. Additionally, the Subsequent Purchase Agreement amended (i)
the Securities Purchase Agreement to correct a typographical error and (ii) the
Registration Rights Agreement in order to provide certain registration rights
thereunder with respect to the Additional Shares and to revise the timeframe for
registration of Common Stock.
The
Subsequent Purchase Agreement may be amended or modified, and its provisions may
be waived, with the consent of the Company and RioCan Holdings.
The
underwriters of the Company’s recent public offering have thirty days to
exercise their over-allotment option to issue up to an additional 1,237,500
shares of Common Stock. In the event the underwriters do exercise
such an over-allotment option, RioCan Holdings may acquire up to an additional
187,500 shares of Common Stock from the Company in order to maintain the
Reporting Persons’ proportionate interest in the Company.
The
foregoing summaries of the Securities Purchase Agreement, the Registration
Rights Agreement, the Partnership Interests Agreement, the Guaranty and the
Subsequent Purchase Agreement do not purport to be complete and are qualified in
their entirety by reference to the complete text of such agreements attached
hereto as Exhibit 2, Exhibit 3, Exhibit 4, Exhibit 5 and Exhibit 7,
respectively.
As of the
date of this statement, except as set forth above, none of the Reporting Persons
or Mr. MacKinnon has any present plan or intention which would result in or
relate to any of the actions described in subparagraphs (a) through (j) of Item
4 of Schedule 13D, although either of them may develop such plans or
proposals.
The
Reporting Persons intend to review on a continuing basis their respective
investments in the Company. As of the date of this statement, no determination
has been made by RioCan REIT or RioCan Holdings to acquire additional shares of
Common Stock or dispose of any shares of Common Stock now held by them, although
either of them may decide to so acquire or dispose of shares of Common Stock in
a manner consistent with their obligations under the Securities Purchase
Agreement, the Registration Rights Agreement and the Partnership Interests
Agreement, as they may be amended from time to time. Any such determination will
depend on market conditions prevailing from time to time
| CUSIP No.:
150602209 |
Page 8
of 9 Pages |
and on
other conditions that may be applicable depending on the nature of the
transaction or transactions involved.
|
Item
5.
|
Interest
in Securities of the Issuer
|
Item 5(a)
of the Schedule 13D is hereby amended and restated in its entirety as
follows:
(a)
RioCan Holdings is the direct beneficial owner of 9,345,236 shares of the Common
Stock, comprised of 7,916,666 shares of Common Stock and a warrant to purchase
an additional 1,428,570 shares of Common Stock. Such shares represent
approximately 15.0% of the Company’s outstanding Common Stock, based upon
60,710,602 shares of Common Stock outstanding as of February 2, 2010, as stated
by the Company in the Prospectus Supplement filed by it on February 2, 2010,
plus the warrant to purchase 1,428,570 shares of Common Stock acquired under the
Securities Purchase Agreement. By virtue of the relationships described under
Item 2 of this statement, RioCan REIT may be deemed to have indirect beneficial
ownership of the shares of Common Stock directly beneficially owned by RioCan
Holdings. Mr. MacKinnon, who is Senior Vice President, Real Estate Finance of
RioCan REIT and RioCan Holdings, beneficially owns 4,500 shares of Common Stock.
Such shares represent approximately 0.00741% of the Company’s outstanding Common
Stock, based upon 60,710,602 shares of Common Stock outstanding as of February
2, 2010, as stated by the Company in the Prospectus Supplement filed by it on
February 2, 2010. To the best of the Reporting Persons’ knowledge, except for
Mr. MacKinnon, none of their respective directors or trustees, as the case may
be, or executive officers owns any Common Stock.
Item 5(c)
of the Schedule 13D is hereby amended and restated in its entirety as
follows:
(c) Mr.
MacKinnon acquired 4,500 shares of Common Stock on the open market on October
27, 2009 at a price of $6.14 per share. RioCan Holdings acquired 1,250,000
shares of Common Stock from the Company on February 8, 2010 at a price of $6.60
per share, pursuant to the Subsequent Purchase Agreement. Except as described in
Item 4 and the two preceding sentences, none of the Reporting Persons or their
respective directors or trustees, as the case may be, or executive officers has
transacted in this class of securities during the past sixty days.
|
Item
7.
|
Material
to be filed as Exhibits.
|
Item 7 of
the Schedule 13D is hereby amended and supplemented by the addition of the
following information:
|
Exhibit
7
|
Agreement,
dated as of February 5, 2010, between RioCan REIT and the
Company***
|
***
Previously filed as Exhibit 10-1 to the Form 8-K filed by the Company on
February 9, 2010 and incorporated by reference in this Statement.
| CUSIP No.:
150602209 |
Page 9
of 9 Pages |
SIGNATURE
After
reasonable inquiry and to the best of its knowledge and belief, the undersigned
certify that the information set forth in this statement is true, complete and
correct.
|
Date:
February 11, 2010
|
|
RIOCAN
REAL ESTATE INVESTMENT TRUST
|
| |
|
|
|
|
|
By: /s/ Raghunath
Davloor
|
| |
|
Name: Raghunath
Davloor |
| |
|
Title: Senior
Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
Date:
February 11, 2010
|
|
RIOCAN
HOLDINGS USA INC.
|
|
|
|
By: /s/ Raghunath
Davloor
|
|
|
|
Name: Raghunath
Davloor
|
|
|
|
Title: Senior
Vice President, Chief Financial Officer and Secretary
|
|
|
|
|
|
|
|
|