Artis Real Estate Investment Trust (AX-UN) M&A Announcement summary

Deal rationale and strategic fit

• The merger creates a diversified, bank-led financial services platform by combining a Schedule I bank, mortgage origination, and a large real estate portfolio, leveraging the strengths of both organizations.

• Capital from real estate asset sales will be rotated into higher ROE financial services opportunities, unlocking value and supporting growth.

• The combined entity offers scale, growth, and strategic synergies, diversifying income streams and enhancing public market positioning.

• Investors gain access to the resilient Canadian financial services sector, historically delivering durable double-digit returns and stable cash flows.

• The leadership team blends deep experience in financial services, real estate, and capital markets, supporting disciplined growth and long-term value creation.

Financial terms and conditions

• Artis unitholders will receive one RFA Financial common share per unit and will own 68% of the new entity, with RFA shareholders owning 32%.

• RFA Financial will be listed on the TSX, and Artis will be delisted post-closing.

• The initial annual dividend is set at $0.44 per share, paid quarterly, with the intention to grow as earnings increase.

• Dividends are expected to be fully covered by net income and cash flow, and classified as eligible dividends for Canadian tax purposes.

• The transaction includes a $25 million termination fee payable by either party under certain circumstances.

Synergies and expected cost savings

• The merger leverages Artis’s real estate and public market expertise with RFA’s private market and banking capabilities, aiming for operational efficiency and higher ROE.

• Capital reallocation from real estate sales to financial services is expected to drive higher returns and faster earnings growth.

• The combined platform expects to benefit from a cost-of-funds advantage and economies of scale, driving improved efficiency ratios.

• The merger is expected to be accretive to net income and enhance shareholder returns through sustainable dividends.