CANMARC reacts to unsolicited bid

MONTREAL, Nov. 28, 2011 /CNW Telbec/ - CANMARC Real Estate Investment Trust ("CANMARC" or the "REIT") announced today that at 5:00 p.m. on November 25, 2011, it received an unsolicited written proposal from Cominar Real Estate Investment Trust ("Cominar"). Pursuant to this unsolicited written proposal (the "Cominar Proposal"), Cominar:

  • proposes to acquire 100% of the outstanding units of CANMARC, on a fully diluted basis, for an all cash purchase price of $15.30 per unit;
  • would offer CANMARC unitholders a unit election option pursuant to which holders of units would exchange CANMARC units for Cominar units, with an aggregate maximum of 16 million Cominar units available pursuant to this option, subject to proration; and
  • sought the REIT to enter into exclusive negotiations with a view to sign definitive agreements within a seven day period, and indicated that it would be prepared to immediately announce its intention to make its offer, by way of takeover bid, directly to the unitholders of CANMARC failing CANMARC's agreement to enter into such exclusive negotiations by 5:00 p.m. on November 27, 2011.

In response to the Cominar Proposal, CANMARC's board of trustees (the "Board") has formed a special committee (the "Special Committee") of independent trustees comprised of Karen A. Prentice (Chair), Gérard A. Limoges and John Levitt to, among other things, consider and review the Cominar Proposal and review and pursue any other alternatives that may be in the best interests of the REIT.  The Special Committee has retained Fasken Martineau DuMoulin LLP as its legal advisor. The REIT has also retained TD Securities Inc. as its financial advisor and Osler, Hoskin & Harcourt LLP continues to act as the REIT's legal advisor.

Although Cominar indicated its desire to negotiate a transaction with the support of the Board, it demanded a response satisfactory to Cominar from the REIT by November 27, 2011 at 5:00 p.m. EST, failing which they would be prepared to immediately announce their intention to make their offer, by way of takeover bid, directly to the unitholders of CANMARC.

The Chairman of the Board and Special Committee, Karen Prentice, said, "Given the REIT was not for sale and that it continues to successfully execute on its business plan, it is unreasonable to ask the REIT to respond to their proposal within a 48 hour window", adding "the Board and the Special Committee, with the support of their advisors, will diligently assess the current situation and will fully consider any offer and communicate the REIT's views to its unitholders.  In the interim, we would encourage our unitholders not to take any action with respect to the proposed offer."

In conjunction with its initial public offering, CANMARC adopted a unitholder rights plan as a mechanism to ensure that in the event of an unsolicited offer, there would be adequate time to appropriately evaluate the offer and to explore alternatives.

"Since its initial public offering on May 25, 2010, CANMARC has delivered an annualized total return of 31% to unitholders, compared to 18% for Cominar units", added Karen  Prentice. She further said "we have a highly experienced management team that has demonstrated their sustained ability to acquire new, high quality assets on an accretive basis and to manage our properties and our business in a manner that benefits both our tenants and our unitholders. CANMARC has created significant value for our unitholders."

"Based on the REIT's positive financial results, high asset quality, strong balance sheet, numerous organic growth opportunities and attractive acquisition pipeline, there continues to be significant upside in CANMARC's unit price." said Jim Beckerleg, CEO of CANMARC.

About CANMARC Real Estate Investment Trust

CANMARC (www.canmarc.ca) is an unincorporated open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Quebec. Managed internally, CANMARC owns a portfolio of Canadian income-producing commercial properties, consisting of retail and office properties with certain industrial properties. In total, CANMARC properties comprise approximately 8.8 million square feet of commercial gross leasable area and 464 multi-family residential units located in Quebec, Atlantic Canada, Western Canada and Ontario.

Forward-looking Statements

This news release may contain forward-looking information within the meaning of applicable securities legislation. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the REIT's control that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the factors discussed under "Risk Factors" in the REIT's latest annual information form.

The REIT's objectives and forward-looking statements are based on certain assumptions, including that (i) the REIT will receive financing on favourable terms; (ii) the future level of indebtedness of the REIT and its future growth potential will remain consistent with the REIT's current expectations; (iii) there will be no changes to tax laws adversely affecting the REIT's financing capacity or operations; (iv) the impact of the current economic climate and the current global financial conditions on the REIT's operations, including its financing capacity and asset value, will remain consistent with the REIT's current expectations; (v) the performance of the REIT's investments in Canada will proceed on a basis consistent with the REIT's current expectations; and (vi) capital markets will provide the REIT with readily available access to equity and/or debt.

The forward-looking statements contained in this news release are expressly qualified in their entirety by this cautionary statement. All forward-looking statements in this press release are made as of the date of this press release. The REIT, except as required by applicable securities legislation, does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise. Additional information about these assumptions and risks and uncertainties is contained in the REIT's filings with securities regulatory authorities, including its latest annual information form, which are available on SEDAR at www.sedar.com.

SOURCE CANMARC REAL ESTATE INVESTMENT TRUST

For further information:

James W. Beckerleg
President and Chief Executive Officer
CANMARC Real Estate Investment Trust
514-931-2591
  Roch Landriault
NATIONAL Public Relations
514-843-2345
Gordon G. Lawlor, CA
Chief Financial Officer
CANMARC Real Estate Investment Trust
514-931-2591 

 

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CANMARC REAL ESTATE INVESTMENT TRUST

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