8-KSecurities & ListingShareholder Matters

WELLTOWER INC. 8-K Report, Unregistered Securities Sale (Feb 27, 2019)

Filed February 27, 2019For Securities:WELL

Summary

Welltower Inc. (WELL) has filed an 8-K report detailing the mandatory conversion of its 6.50% Series I Cumulative Convertible Perpetual Preferred Stock into common stock. This conversion, effective February 28, 2019, will result in the elimination of all outstanding Series I Preferred Stock, with approximately 5.36 million shares of common stock expected to be issued based on the final conversion rate of 0.8857 shares of common stock per preferred share. This action is a material modification to the rights of security holders, replacing preferred stock with common stock. Investors should note that this conversion is being conducted under an exemption from registration requirements. The company also included standard forward-looking statements, highlighting potential risks and uncertainties that could impact future performance, including economic conditions, capital markets, healthcare industry trends, and operational performance of its tenants and properties. These statements are not guarantees of future results.

Key Highlights

  • 1Mandatory conversion of 6.50% Series I Cumulative Convertible Perpetual Preferred Stock into common stock.
  • 2Conversion date is February 28, 2019.
  • 3Approximately 6.06 million shares of Series I Preferred Stock were outstanding as of February 22, 2019.
  • 4The final conversion rate is 0.8857 shares of Common Stock for each share of Series I Preferred Stock.
  • 5Upon conversion, Series I Preferred Stock will be eliminated, and common stock will be issued.
  • 6The issuance of common stock is being conducted under Section 3(a)(9) of the Securities Act of 1933, exempting it from registration requirements.
  • 7The action constitutes a material modification to the rights of security holders.

Frequently Asked Questions

Welltower Inc. is mandatorily converting all of its outstanding 6.50% Series I Cumulative Convertible Perpetual Preferred Stock into its common stock on February 28, 2019. This means the preferred stock will be replaced by common stock.

Based on the final conversion rate of 0.8857 shares of common stock per share of Series I Preferred Stock, and with approximately 6.06 million shares of Series I Preferred Stock outstanding, Welltower expects to issue a significant number of new common shares. Holders will receive common stock for their preferred shares and potentially cash for fractional shares.

The conversion is a mandatory event that will simplify the capital structure by eliminating the preferred stock. The issuance of common stock in exchange for the preferred stock is being conducted under Section 3(a)(9) of the Securities Act of 1933, which provides an exemption from the standard registration requirements.

Holders of Series I Preferred Stock will no longer have their preferred shares outstanding after February 28, 2019. Instead, they will receive shares of Welltower's common stock, and any rights associated with the preferred stock will terminate, except for the right to receive the common stock and any cash for fractional shares.