8-KOther EventsExhibits & Filings

WELLTOWER INC. 8-K Report, Corporate Update (May 5, 2021)

Filed May 5, 2021For Securities:WELL

Summary

Welltower Inc. (WELL) filed an 8-K on May 4, 2021, to announce the replacement of its existing automatic shelf registration statement with a new one. This update is primarily to facilitate potential future offerings of its common stock. The filing details two key components: prospectus supplements related to its DownREIT and DownREIT II entities, which could result in the issuance of up to approximately 620,731 and 475,327 shares of common stock, respectively, under specific redemption scenarios. Additionally, the company entered into an Equity Distribution Agreement allowing for an "at-the-market" (ATM) offering of up to $2 billion of its common stock over time. This ATM program includes provisions for forward sale agreements, enabling the company to potentially access capital by selling shares at a future date at a predetermined price, though settlement terms can influence the net proceeds received. These filings indicate Welltower's proactive approach to managing its capital structure and maintaining flexibility for future growth and financing needs. The DownREIT and DownREIT II components suggest a mechanism for settling unit redemptions with stock rather than cash, which could preserve liquidity. The substantial ATM offering capacity provides Welltower with a significant avenue to raise capital as market conditions allow, either through direct sales or forward arrangements. Investors should note that the actual issuance of shares under the DownREIT structures is contingent on unit holder redemptions and management's election, and the ATM offering represents an authorization to sell, not a commitment to sell, up to the stated amount.

Key Highlights

  • 1Welltower replaced its existing automatic shelf registration statement with a new one, filed on Form S-3, to allow for future stock offerings.
  • 2Prospectus supplements were filed for DownREIT and DownREIT II, potentially enabling the issuance of up to 1,096,058 shares of common stock under specific redemption conditions.
  • 3The company established an "at-the-market" (ATM) offering program to sell up to $2 billion of its common stock over time.
  • 4The ATM program includes provisions for forward sale agreements, allowing for capital raises through forward transactions with various financial institutions.
  • 5The actual issuance of shares related to DownREITs depends on unit holder actions and management's decisions.
  • 6The ATM offering is an authorization to sell, not a guarantee that shares will be sold, up to the $2 billion limit.
  • 7Various legal opinions and tax opinions were filed as exhibits, supporting the offerings.

Frequently Asked Questions

The new registration statement (Form S-3) replaces an older one and is designed to streamline future offerings of Welltower's common stock. The prospectus supplements specifically relate to the DownREIT and DownREIT II entities, outlining a potential mechanism to issue company stock to holders of Class A units upon redemption, instead of or in addition to cash.

An ATM offering allows a company to sell shares of its stock over time in the open market at prevailing market prices. Welltower has authorized the sale of up to $2 billion of its common stock through this program, using multiple sales agents.

Forward sale agreements involve Welltower agreeing to sell shares at a future date to a forward purchaser at a price determined at the time of the agreement. Initially, Welltower doesn't receive proceeds from the sale of borrowed shares by the forward seller. The company expects to receive proceeds upon settlement, typically by delivering shares or receiving cash, but the settlement terms (physical, cash, or net share) can impact the ultimate proceeds received by Welltower.

These filings primarily represent an authorization for potential future stock issuances and capital raises. The DownREIT share issuances are contingent events. The ATM offering is an opportunity for Welltower to raise capital opportunistically. While an increase in the number of outstanding shares could dilute existing shareholders, the extent and timing of any such dilution depend on whether and when these programs are utilized.