Item 1.01 | Entry into a Material Definitive Agreement. |
On September 3, 2020, CTO Realty Growth, Inc. (the “Company”) announced that its Board of Directors (the “Board”) has unanimously approved a plan for the Company to elect to be subject to tax as a real estate investment trust (“REIT”) for U.S. federal income tax purposes commencing with its taxable year ending December 31, 2020 (the “REIT Conversion”). In connection with the REIT Conversion, on September 3, 2020, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with CTO NEWCO REIT, Inc., a newly formed, wholly owned subsidiary of the Company (“NEWCO”), providing for, among other things, the merger of the Company with and into NEWCO (the “Merger”), with NEWCO succeeding to and continuing to operate the existing business of the Company. Pursuant to the Merger, the surviving entity will be a corporation organized in the state of Maryland that will be renamed “CTO Realty Growth, Inc.” and whose charter will include certain standard REIT ownership limitations and transfer restrictions applicable to its capital stock. Pursuant to the Merger Agreement, the outstanding shares of the Company’s common stock will be converted into the right to receive the same number of shares of NEWCO common stock.
Consummation of the Merger is subject to certain conditions, including:
| ● | approval by the Company’s and NEWCO’s shareholders; |
| ● | receipt by the Company and NEWCO from Vinson and Elkins L.L.P. of an opinion to the effect that the merger qualifies as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”) and that each of the Company and NEWCO is a party to a reorganization within the meaning of Section 368(b) of the Code; |
| ● | approval for listing on the New York Stock Exchange of NEWCO common stock, subject to official notice of issuance; |
| ● | the effectiveness of a registration statement on Form S-4 (the “Form S-4”) to be filed by NEWCO, without the issuance of a stop order or initiation of any proceeding seeking a stop order by the Securities and Exchange Commission (the “SEC”); and |
| ● | receipt of all governmental approvals and third-party consents to the Merger, except for consents as would not reasonably be expected to materially and adversely affect the business, financial condition or results of operations of NEWCO. |
The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is attached hereto as Exhibit 2.1.
Item 7.01 | Regulation FD Disclosure. |
On September 3, 2020, the Company issued a press release announcing the Board’s approval of the REIT Conversion, the entry into the Merger Agreement and its intention to hold a special meeting of shareholders in the fourth quarter of 2020 for the purpose of approving the Merger. A copy of that press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
The furnishing of these materials is not intended to constitute a representation that such furnishing is required by Regulation FD or other securities laws, or that the materials include material investor information that is not otherwise publicly available. In addition, the Company does not assume any obligation to update such information in the future.
The information in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that Section. The information in this Current Report on Form 8-K shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act unless it is specifically incorporated by reference therein.
