Canmarc accepts latest Cominar bid
January 17, 2012 - 7:48pm BY JOHN DEMONT BUSINESS REPORTER
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Funny what $1.20 will do.
Last November, when Cominar Real Estate Investment Trust offered $15.30 for every Canmarc Real Estate Investment Trust unit, the takeover was characterized by the Canmarc board as “unfriendly” and the offer “too low.”
Last weekend, though, Cominar upped its bid to $16.50 per unit.
The board of Canmarc, previously known as Homburg Canada Real Estate Investment Trust, endorsed the deal.
On Tuesday, so did Michael Mills, a Halifax analyst with Beacon Securities Ltd.
“We believe the offer represents fair value for unitholders and recommend they tender to this offer,” he said in a report.
The offer works out to 24 per cent more than what the units were trading for before Cominar’s first offer. Canmarc units closed Tuesday at $16.54, with more than a million shares trading hands.
The two companies weren’t always so amicable. In 2007, after a long battle, Homburg Invest Inc., another company started by high-flying Dutch-born businessman Richard Homburg, outbid Cominar to take over investment fund Alexis Nihon.
As the winner, Homburg obtained the Alexis Nihon plaza in Montreal along with other assets.
In 2009, Homburg Invest spun off its Canadian real estate assets into Homburg Canada REIT.
In September, Homburg Canada REIT changed its name to Canmarc, to distance itself from the troubles engulfing the other companies bearing the Homburg name.
Now, Cominar is offering $900 million to take over the company, which holds some of the Alexis Nihon properties it originally sought.
Canmarc unitholders can receive cash for their units or .76 per cent of a Cominar trust fund per Canmarc unit. The deal, which is expected to close on Jan. 27, requires at least two-thirds of Canmarc unitholders to tender their investments.
Despite the new price, that might not be so easy. One intriguing question is what happens to the $191.7 million in Canmarc units — a 16.1 per cent stake in the company — sitting in the investment portfolio of Homburg Invest.
In September, the debt-plagued company went to court to obtain protection under the Companies’ Creditors Arrangement Act while Deloitte & Touche Inc., the court-appointed monitor, restructures its affairs. (Homburg owns 72.5 per cent of the voting shares in the company but has been forced by Dutch regulators to put his shares in the hands of independent trustees.)
Deloitte & Touche could not comment about whether the Homburg Invest stake could be sold to Cominar under the bid.