Middlefield Announces Real Estate Fund Merger

TORONTO, Jan. 10, 2024 (GLOBE NEWSWIRE) -- Middlefield is pleased to announce that Sustainable Real Estate Dividend Fund (“Real Estate Closed-End Fund”) will merge into the Middlefield Real Estate Dividend ETF (“Real Estate ETF”) (TSX:MREL) (“the Merger”), which will result in unitholders of both funds benefiting from a larger fund with expected assets of over $120 million (based on current valuations), better liquidity and the opportunity to continue participating in the real estate sector via the Real Estate ETF managed by Middlefield Limited (the “Manager”). The Merger is expected to be completed on or about May 16, 2023 (the “Effective Date”), with the Real Estate ETF being the continuing entity following the Merger.

The Merger will be effected on a tax-deferred roll-over basis and accordingly, unitholders of the funds to be merged will not realize capital gains or losses as a result of the Merger. The Manager has determined that the Merger would be in the best interests of the unitholders of the funds to be merged. All costs and expenses directly associated with the Merger will be borne by the Manager and not the funds being merged.

By owning the ETF Units resulting from the Merger, unitholders of Real Estate Closed-End Fund will continue to be invested in a fund with similar investment strategies and objectives, while also benefitting from the structural advantages of ETFs, which trade more efficiently and closer to their net asset value. Additionally, the larger asset base is expected to improve liquidity and lower overall cost. Lastly, unitholders of the Real Estate Closed-End Fund will see a management fee reduction from 1.25% to 0.75%.

The Merger will be effected at an exchange ratio calculated as the net asset value per unit of the Real Estate Closed-End Fund divided by the net asset value per unit of the Real Estate ETF in each case determined as at the close of trading on the TSX on the business day immediately prior to the Effective Date. Pursuant to the Merger, the Real Estate ETF will assume the liabilities of the Real Estate Closed-End Fund and will issue units of the Real Estate ETF in satisfaction of the purchase price for all the assets of the Real Estate Closed-End Fund.