Slate Grocery REIT (TSX:SGR) (TSX:SGR) (the "REIT"), an owner and operator of U.S. grocery-anchored real estate, announced today that it has entered into a definitive arrangement agreement (the "Arrangement Agreement") with a joint venture (the "Purchaser") between Brixmor Property Group Inc. ("Brixmor") and affiliates of Everview Partners, L.P. ("Everview"), pursuant to which the Purchaser will acquire all of the issued and outstanding trust units of the REIT (the "Units", and the holders thereof, the "Unitholders") for US$13.00 in cash per Unit (the "Consideration"), representing a total enterprise value of approximately US$2.3 billion (the "Transaction").

The all-cash Transaction provides Unitholders with immediate liquidity and certainty of value at an attractive premium. The Consideration represents a premium of approximately 13% to the closing price of the Units on May 21, 2026, the last trading day prior to the public announcement of the strategic review process, and a premium of approximately 20% to the closing price of the Units on September 23, 2026, the last trading day prior to the REIT’s announcement of the suspension of distributions.

The Transaction is the culmination of the strategic review process previously announced by the REIT on May 22, 2026. At that time, the REIT announced that the Board of Trustees had established a special committee comprised solely of independent trustees (the "Special Committee") in response to an unsolicited proposal from affiliates of Slate Asset Management (Canada) L.P., the external manager of the REIT (the "Manager" or "Slate Asset Management"), and that the Special Committee had a broad mandate to consider and evaluate strategic alternatives, including a potential sale of the REIT.

Special Committee and Board Recommendation

Following an extensive strategic review process, including a competitive auction process, and after consultation with its financial, legal, tax and real estate advisors, the Special Committee unanimously determined that the Transaction is fair to Unitholders and in the best interests of the REIT and unanimously recommended that the Board approve the Arrangement Agreement and recommend that Unitholders vote in favour of the Transaction.

The Board, having received the unanimous recommendation of the Special Committee, has unanimously determined, with interested trustees abstaining from voting, that the Transaction is in the best interests of the REIT and is fair to Unitholders (other than the Manager and its affiliates and related parties), and unanimously recommends that Unitholders vote FOR the Transaction.

In reaching its recommendation, the Special Committee considered, among other things:

the immediate liquidity and certainty of value provided by the all-cash Consideration;
the premium to the REIT’s trading price;
the comprehensive strategic review process;
the relative attractiveness of the Transaction compared to other strategic alternatives reasonably available to the REIT, including proposals received in the REIT’s competitive auction process;
the terms of the Arrangement Agreement; and
the fairness opinions received from Evercore Group L.L.C. and CIBC World Markets Inc.
Fairness Opinions

Each of Evercore Group L.L.C., as financial advisor to the Special Committee, and CIBC World Markets Inc., retained to provide an independent fairness opinion, has provided a fairness opinion to the Special Committee and the Board to the effect that, as of the date of such opinion, and based upon and subject to the assumptions, limitations and qualifications set forth therein, the Consideration to be received by Unitholders (other than the Manager and its affiliates and related parties) pursuant to the Arrangement Agreement is fair, from a financial point of view, to such Unitholders.

Voting and Support Agreements

Concurrently with the execution of the Arrangement Agreement, each of the trustees holding Units and the Manager and its affiliates agreed to vote their respective Units, as applicable, in favour of the Transaction pursuant to voting and support agreements, subject to customary exceptions. The Units represented by the voting and support agreements represent approximately 5.9% of the issued and outstanding Units of the REIT.

Transaction Details

The Transaction will be implemented by way of a plan of arrangement under the Business Corporations Act (Ontario) and the Trustee Act (Ontario), and is expected to close in the first quarter of 2027, subject to customary closing conditions, including receipt of Unitholder approval and approval of the Ontario Superior Court of Justice (Commercial List) and the concurrent termination of the Management Agreement with the Manager. The Transaction is not subject to any financing conditions and, other than any approval that may be required under the Investment Canada Act (Canada), is not subject to any regulatory approvals.

The required Unitholder approval for the Transaction will consist of: (i) at least 66 2/3% of the votes cast on the arrangement by Unitholders voting together as a single class; and (ii) a simple majority of the votes cast on the arrangement by such Unitholders, excluding the Manager and its affiliates and related parties, will vote together as a single class, in each case as required by Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions.

The Arrangement Agreement contains customary non-solicitation covenants on the part of the REIT, subject to customary "fiduciary out" provisions. A termination fee of approximately US$31 million would be payable by the REIT to the Purchaser in certain circumstances, including in the context of a superior proposal supported by the REIT. The REIT would also be entitled to a reverse termination fee payable by the Purchaser of approximately US$63 million if the Transaction is not completed in certain circumstances.

The Purchaser has provided evidence of fully committed financing, including debt commitment letters and equity commitment letters.

If the Transaction closes after January 20, 2027, Unitholders will also receive additional cash consideration of US$0.002482 per Unit for each day from and after such date until closing, which would increase the aggregate consideration payable to Unitholders by approximately US$150,000 per day.

Following completion of the Transaction, the REIT will become a privately held entity, the Units will no longer be listed on the Toronto Stock Exchange (the "TSX") and the REIT will cease to be a reporting issuer under Canadian securities laws.

No distributions will be declared or paid by the REIT for October 2026 through the closing of the Transaction.

Acquisition of NA Essential’s Joint Venture Interests

Effective as of the closing of the Transaction, pursuant to a purchase agreement entered into by Purchaser and Slate North American Essential Real Estate REIT, Inc. ("NA Essential"), the Purchaser will acquire the interest of NA Essential in the joint ventures between the REIT and NA Essential, for an aggregate purchase price of approximately US$187.5 million (subject to a corresponding adjustment if the transaction closes after January 20, 2027).

Termination of Management Agreement

The REIT is externally managed by the Manager pursuant to the Third Amended and Restated Management Agreement dated October 1, 2021 (the "Management Agreement"). The Transaction is conditioned upon the termination of the Management Agreement, which termination shall become effective upon closing. The Manager has agreed to the termination of the Management Agreement at closing in exchange for a fixed payment of US$50 million (the "Termination Payment"), which is inclusive of all severance, reimbursement, termination costs, change of control payments and other amounts that may otherwise be payable in connection with the termination of the Management Agreement. The Termination Payment has been approved by the independent trustees of the REIT.