- Transaction provides compelling value and immediate liquidity to unitholders following an extensive and rigorous Strategic Review Process
- Offer represents 16.3% premium to Cominar's 20-day volume-weighted average price per unit on the TSX and 63.2% premium to the closing unit price on
September 15, 2020 , the last trading day prior to the announcement of the Strategic Review Process - Acquisition led by
Montreal -based Canderel will significantly benefit key stakeholders of Cominar, unlocking new opportunities for growth and development in communities where the REIT operates Montreal -based Mach to acquire approximately$1.5 billion of retail and office properties as part of the Transaction- Transaction has unanimous support of both the
Board of Trustees of Cominar and the Special Committee of the Board, comprised of independent Trustees - Management Information Circular – including full details regarding the background to transaction and voting recommendations for unitholders – to be issued in due course, ahead of special meeting of Cominar unitholders scheduled for
December 21, 2021 - Transaction expected to be completed in the first quarter of 2022
Under the terms of the Arrangement Agreement, the Purchaser will acquire Cominar for consideration of
As part of the Plan of Arrangement, Mach will acquire, through its affiliate,
The Transaction provides Cominar unitholders with compelling value and immediate liquidity, following an extensive Strategic Review Process overseen by a Special Committee made up of independent Trustees, with the input of financial and legal advisors. Furthermore, the Transaction will provide significant benefits to key stakeholders, including tenants, by leveraging the resources of new ownership groups, such as Canderel and Mach, with deep
"Following the extensive Strategic Review Process, and based on the recommendation of the independent Trustees of the Board, we are pleased to have reached an outcome that provides immediate value to our unitholders," said
"This Transaction is the result of our extensive and thorough Strategic Review Process under which a broad set of alternatives aimed at enhancing unitholder value were evaluated by the Special Committee of the
"This transaction will provide significant benefits to key stakeholders, including tenants of Cominar, by leveraging the resources of the Canderel platform and a
"We look forward to expanding our leading position in
The Transaction is expected to close in the first quarter of 2022, subject to receipt of Cominar unitholder, court and required regulatory approvals as well as satisfaction of customary closing conditions.
TRANSACTION HIGHLIGHTS AND BOARD RECOMMENDATION
The Transaction is the culmination of a comprehensive Strategic Review Process publicly announced by Cominar on
- Compelling Value to Cominar Unitholders: 16.3% premium to Cominar's 20-day volume-weighted average price per Unit on the TSX for the period ending on
October 22, 2021 , and a 63.2% premium to the closing Unit price onSeptember 15, 2020 , the last trading day prior to the announcement of the Strategic Review Process. - Certainty of Value and Immediate Liquidity: The Transaction allows unitholders to realize an attractive price for their Units through an all-cash offer, thereby providing certainty of value and immediate liquidity.
- Highest Proposal and Arm's-Length Negotiations: As part of the Strategic Review Process, numerous potential financial and strategic purchasers were contacted. The Arrangement Agreement is the result of extensive arm's-length negotiations between Cominar and the Purchaser with oversight and participation of the Special Committee and Cominar's external financial and legal advisors and represents the best and highest proposal received as part of the Strategic Review Process.
- Independent Valuation and Fairness Opinion:
Desjardins Capital Markets provided an independent valuation to the Special Committee and Board verbally, to be confirmed in writing, which determined that, as atOctober 24, 2021 , based upon and subject to the assumptions, limitations and qualifications to be contained inDesjardins Capital Markets' written valuation report, the fair market value of the Units ranged from$11.00 to$12.50 per Unit.Desjardins Capital Markets has also provided the Special Committee and the Board with a verbal opinion, to be confirmed in writing, to the effect that, as atOctober 24, 2021 , the Consideration to be received by unitholders under the Transaction is fair, from a financial point of view, to such holders other thanMach Capital and holders of Rollover Units (as defined below), subject to the limitations, qualifications, assumptions, and other matters to be set forth in such written opinion. - Two Additional Fairness Opinions: Both
National Bank Financial Inc. andBMO Capital Markets , acting as financial advisors to the REIT, have separately provided the Special Committee and the Board with a verbal opinion, to be confirmed in writing, to the effect that, as atOctober 24, 2021 , the Consideration to be received by unitholders under the Transaction is fair, from a financial point of view, to such holders other thanMach Capital and holders of Rollover Units, in each case subject to the respective limitations, qualifications, assumptions, and other matters to be set forth in such written opinions. - Benefits to Stakeholders: The Special Committee and the Board believe that the terms of the Arrangement Agreement treat the stakeholders of Cominar fairly and the Transaction will provide significant benefits to key stakeholders, including tenants, by leveraging the resources of new ownership groups with deep
Québec ties. Further, the Cominar asset portfolios being sold in the Transaction are being purchased by the Asset Purchasers who possess the required capabilities, as well as the necessary financial and other resources, to successfully manage such asset portfolios. - Reasonable Likelihood of Completion: Canderel and FrontFour, as well as their consortium partners, have demonstrated commitment, credit worthiness and a consistent track record of completing large-scale real estate transactions which is indicative of the ability of Canderel and FrontFour and equity partners Artis, Sandpiper and KREI to complete the transactions contemplated by the arrangement. The Asset Purchasers are credible and reputable and have equally demonstrated their successful execution of significant real estate transactions. In addition, the Transaction is not subject to any due diligence condition or financing condition and the Special Committee and the Board believe that there are limited closing conditions that are outside of the control of Cominar and, as such, there is a reasonable likelihood of completion. The obligations of the Purchaser and the Asset Purchasers to complete the Transaction are subject to a limited number of customary conditions that the Special Committee and the Board believe are reasonable in the circumstances.
- Required Unitholder and Court Approvals: The Transaction will become effective only if it is approved by at least 66 2/3% of the votes cast by unitholders at a special meeting of unitholders called to consider the Transaction and the
Superior Court ofQuébec , after considering the procedural and substantive fairness of the Transaction.
ADDITIONAL TRANSACTION DETAILS
Under the Transaction, an affiliate of Canderel,
The Arrangement Agreement includes customary provisions relating to non-solicitation, including customary "fiduciary out" provisions that entitle the Board to consider and, subject to certain conditions, accept a superior proposal if the Purchaser does not match the superior proposal. A termination fee of
A special meeting of Cominar unitholders to consider the proposed Transaction is expected to be held on or about
As part of the Transaction, Cominar has agreed that distributions for October, November and December, 2021 (payable respectively in November and December, 2021 and January, 2022) will be suspended. If the Transaction has not closed by
Additional details regarding the terms and conditions of the Transaction, the rationale for the recommendations made by the Special Committee and the Board, the independent valuation and the fairness opinions, and how unitholders can participate in and vote at the virtual meeting, will be set out in Cominar's management information circular. Copies of the Arrangement Agreement, the Asset Purchase Agreements, the Voting and Support Agreement and the management information circular will be filed by the REIT under its profile at www.sedar.com.
ADVISORS
Scotiabank,
ABOUT COMINAR
Cominar is one of the largest diversified real estate investment trusts in
ABOUT CANDEREL
Canderel is one of
For more information about Canderel, please visit www.canderel.com.
ABOUT FRONTFOUR
FrontFour is a multi-strategy investment company based in
ABOUT ARTIS
Artis is a diversified Canadian real estate investment trust with a portfolio of industrial, office and retail properties in
ABOUT SANDPIPER
Sandpiper is a
ABOUT KREI
KREI is part of
ABOUT MACH
For more than twenty years, Group Mach (www.groupemach.com) has been recognized for its expertise in commercial, industrial, institutional and residential projects and in the harmonization of mixed-use built environments. Group Mach is positioned as a leader in all aspects of development, including acquisition, construction and property management. With a total portfolio of over 30 million square feet of properties and 10 million square feet of land, including over 20 properties in development (including Quartier des Lumières) in
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
Certain statements made in this news release are forward-looking statements within the meaning of applicable securities laws, including, but not limited to, statements with respect to the rationale of the Special Committee and the
Although the REIT believes that the forward-looking statements in this news release are based on information and assumptions that are current, reasonable and complete, these statements are by their nature subject to a number of factors that could cause actual results to differ materially from management's expectations and plans as set forth in such forward-looking statements, including, without limitation, the following factors, many of which are beyond the REIT's control and the effects of which can be difficult to predict: (a) the possibility that the proposed Transaction will not be completed on the terms and conditions, or on the timing, currently contemplated, and that it may not be completed at all, due to a failure to obtain or satisfy, in a timely manner or otherwise, required unitholder, court and regulatory approvals and other conditions of closing necessary to complete the Transaction or for other reasons; (b) risks related to tax matters; (c) the possibility of adverse reactions or changes in business relationships resulting from the announcement or completion of the Transaction; (d) risks relating to the REIT's ability to retain and attract key personnel during the interim period; (e) the possibility of litigation relating to the Transaction; (f) credit, market, currency, operational, liquidity and funding risks generally and relating specifically to the Transaction, including changes in economic conditions, interest rates or tax rates; (g) business, operational and financial risks and uncertainties relating to the COVID-19 pandemic; and (h) other risks inherent to the REIT's business and/or factors beyond its control which could have a material adverse effect on the REIT or the ability to consummate the Transaction.
Readers are cautioned not to place undue reliance on the forward-looking statements and information contained in this news release. Cominar disclaims any obligation to update any forward-looking statements contained herein, whether as a result of new information, future events or otherwise, except as required by law.
SOURCE
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