Cominar Shareholders Approve Canderel-Led Deal to Go Private
(Bloomberg) -- Shareholders of Cominar Real Estate Investment Trust accepted a C$2.2 billion ($1.7 billion) offer to go private as the Canadian owner of malls and office properties adjusts to Covid-induced changes in the commercial real estate market.
Under the deal approved on Tuesday, a consortium of investors led by Montreal-based Canderel Real Estate Property Inc. will pay C$11.75 per Cominar share to take the company private. The acquiring group will, in turn, sell off some of Cominar’s retail and office portfolio to Montreal’s Groupe Mach Inc. for C$1.5 billion and its industrial real estate to Blackstone Inc. for an undisclosed sum.
Covid-19 prompted lockdowns that crimped the near-term earning power of retail and office properties, while also raising doubts about their long-term value in a world more accustomed to e-commerce and remote work. Against this backdrop, Vanier, Quebec-based Cominar conducted a 13-month review of its portfolio of commercial property concentrated in Canada’s French-speaking province, before ultimately announcing the buyout deal in October.
The investor group taking Cominar private also includes FrontFour Capital Group LLC, Artis Real Estate Investment Trust and partnerships managed by Sandpiper Group. They will retain some of Cominar’s retail and office properties.
Before the vote on Tuesday, one of Cominar’s shareholders, Letko, Brosseau & Associates Inc., voiced opposition to the offer, saying the price per share was below where Cominar’s stock was trading before the pandemic, and where the company assessed the value of its own assets.
The shareholder also questioned why the buying consortium was selling Cominar’s assets to Groupe Mach and Blackstone to help pay for the deal rather than Cominar selling the assets itself before going private, and why the price Blackstone was paying for the industrial assets -- a type of commercial real estate that has performed strongly through the pandemic -- wasn’t disclosed.
Cominar’s shares were up 2.7% to C$11.71 at 12:46 p.m. in Toronto.
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