Unitholders of Canmarc Real Estate Investment Trust ("Canmarc") to receive $15.30 in cash per Canmarc Unit (as defined below), not
subject to proration
All-cash offer represents a premium of 15.2% over the closing price of
the Canmarc Units on November 25, 2011
Opportunity for Canmarc unitholders to participate in the growth of the
combined entity through a unit election option, capped at 16 million
units (the "Cominar Units") of Cominar Real Estate Investment Trust ("Cominar")
Combined entity ideally positioned for growth, with a unique portfolio
of high-quality real estate comprising approximately 30 million square
feet, attractive geographical and asset-class diversification and an
enhanced capital markets profile
Transaction immediately accretive to Cominar's distributable income,
funds from operations and adjusted funds from operations
Cominar and its subsidiaries own approximately 15.1% of the total issued
and outstanding Canmarc Units
QUÉBEC CITY, Nov. 28, 2011 /CNW Telbec/ - Cominar (TSX: CUF.UN)
announced today the purchase, by way of a private agreement (the "Purchase Agreement"), of a total of 3,099,300 Canmarc Units, representing 5.7% of the
total issued and outstanding Canmarc Units.
As of the date hereof, Cominar and its subsidiaries own approximately
15.1% of the total issued and outstanding Canmarc Units, making Cominar
the second-largest unitholder of Canmarc, based on publicly-available
Intention to Make an Offer
Cominar also announced today that it intends to make an offer to
purchase, through wholly-owned subsidiaries, all of the issued and
outstanding trust units of Canmarc (the "Trust Units"), together with any associated rights (the "URP Rights", and together with the Trust Units and the Trust Units that may become
issued and outstanding upon the exercise, conversion or exchange of
securities convertible into or exchangeable for Trust Units,
collectively, the "Canmarc Units") that Cominar and its subsidiaries do not already own (the "Offer").
Cominar approached the Board of Trustees of Canmarc to pursue a
supported transaction. Canmarc has advised Cominar that it is not
prepared to enter into such discussions.
Pursuant to the Offer, the unitholders of Canmarc will receive $15.30 in
cash per Canmarc Unit (the "Cash Alternative"), not subject to proration. Alternatively, Cominar proposes to offer
Canmarc unitholders the opportunity to participate in the growth of the
combined entity via a unit election option pursuant to which Canmarc
unitholders would exchange each Canmarc Unit they hold for 0.7054 Cominar Units (the "Unit Alternative"), with an aggregate maximum of 16 million Cominar Units available
pursuant to this option, subject to proration.
The Offer, which was unanimously approved by Cominar's Board of
Trustees, is expected to be immediately accretive to Cominar's
distributable income, funds from operations and adjusted funds from operations per Cominar
The Offer is not subject to a vote by Cominar unitholders.
Pursuant to the Purchase Agreement, Cominar agreed with the vendor of
such Canmarc Units that if, within a 180-day period starting as of the
date hereof, Cominar, or any of its affiliates, completes the Offer for
consideration to the unitholders of Canmarc in excess of $15.30 per
Canmarc Unit, it would pay the vendor the difference between such
offered consideration and $15.30.
The Cash Alternative
The all-cash purchase price under the Cash Alternative represents a
premium of 15.2% over the closing price of $13.28 per Canmarc Unit on
November 25, 2011, the last trading day prior to the announcement of
The consideration under the Cash Alternative provides Canmarc
unitholders with certainty of value and immediate liquidity, and
removes the risk associated with the continued ownership of Canmarc
The Offer is not subject to any financing condition. National Bank of
Canada, Bank of Montreal and Caisse Centrale Desjardins have provided
Cominar with a commitment to fund the entire consideration payable for
the Canmarc Units and back-stop post-closing refinancing and liquidity
The Unit Alternative
Based on the exchange ratio offered under the Unit Alternative and
before any proration of the unit consideration, the monthly cash
distributions to Canmarc unitholders electing the Unit Alternative are
expected to increase by approximately 6.9%.
Additionally, Canmarc unitholders electing the Unit Alternative will
have the opportunity to participate in the future upside of Cominar.
The acquisition of Canmarc is expected to significantly enhance
Cominar's profile by providing it with the following benefits:
Addition of high-quality, complementary portfolio of properties: The acquisition of Canmarc will provide Cominar with an additional 8.8
million square feet of high-quality real estate that is complementary
to its existing portfolio. Combined with Cominar's existing properties,
the addition of Canmarc's assets will create a unique portfolio of
high-quality properties including a number of landmark buildings.
Enhanced size and diversification: The acquisition of Canmarc will increase Cominar's asset base by
approximately 42% to approximately 30 million square feet, with an
enhanced footprint in the Province of Québec and a meaningful presence
in the Maritimes, western Canada and Ontario. Furthermore, Cominar's
portfolio will benefit from enhanced diversification among the office,
retail and industrial asset classes.
Improved capital markets profile: The acquisition of Canmarc will increase Cominar's enterprise value to
$4.4 billion, creating the second-largest diversified REIT in Canada,
while increasing liquidity for Cominar unitholders. Accordingly,
Cominar will benefit from stronger access to capital.
Lower cost of capital: The increased size and enhanced geographic and asset class
diversification resulting from the acquisition of Canmarc is expected
to allow Cominar to benefit from a lower cost of capital, thus
improving its competitiveness for future asset and portfolio
Positioned for further growth: The combined entity will be ideally positioned to execute Cominar's
continued expansion in its key markets and in the Ontario market.
Synergies: Given the scale of its existing operations in Québec, Cominar expects
to realize synergies from the combination of the two entities.
Cominar's knowledge of the key markets in which Canmarc operates is
expected to result in lower operating costs and improved operating
efficiencies, creating further synergies for Cominar.
Immediately accretive: The transaction is expected to be immediately accretive to
distributable income, funds from operations and adjusted funds from
operations. The accretion to adjusted funds from operations is in turn
expected to result in a decreased payout ratio for the combined entity.
Mr. Michel Dallaire, Cominar's President and Chief Executive Officer,
said: "The Canmarc assets are highly complementary to Cominar's
existing portfolio. With a unique base of high-quality properties
benefiting from increased scale and diversification, as well as a
significantly-enhanced capital markets profile, Cominar will be
ideally-positioned to continue its geographic expansion."
Pro Forma Cominar Leverage
While the Offer will require Cominar to temporarily increase its
leverage, Cominar intends to align its capital structure with its
long-term objectives over time.
Mr. Robert Després, Chairman of Cominar's Board of Trustees, said:
"Cominar's historically conservative approach to leverage has provided
it with the financial flexibility to pursue attractive investment
opportunities such as the acquisition of Canmarc. Cominar's Board of
Trustees is confident that management will successfully reduce
Cominar's leverage in due course through access to attractive capital,
reflecting its enhanced scale and geographic and asset class
Additional Details on the Offer
Cominar's takeover bid will be made available to unitholders of Canmarc
following receipt of a complete unitholders' list from Canmarc or
earlier by publication of an advertisement of the takeover bid. The
Offer will be subject to certain conditions outlined in the definitive
offer documentation that Cominar expects to file in the near future
with Canadian securities regulatory authorities.
This press release does not constitute an offer for or solicitation of
Canmarc Units in any jurisdiction. Any such solicitation would be made
only by formal offer and only in those jurisdictions where Cominar may
legally do so.
BMO Capital Markets is acting as financial advisor to Cominar. Davies
Ward Phillips & Vineberg LLP is acting as legal counsel to Cominar.
PROFILE as at November 28, 2011
Cominar is the largest commercial property owner in the Province of
Québec. Cominar owns a real estate portfolio of 269 high-quality
properties, consisting of 53 office, 55 retail and 161 industrial and
mixed-use buildings that cover a total area of 21.0 million square feet
in the Greater Québec City, Montréal and Ottawa-Gatineau areas as well
as in the Atlantic Provinces. Cominar's objectives are to deliver
growing cash distributions payable monthly to its unitholders and to
maximize unitholder value by way of integrated management and the
expansion of its portfolio.
This press release may contain forward-looking statements with respect
to Cominar and its operations, strategy, financial performance and
financial condition. These statements generally can be identified by
the use of forward-looking words such as "may", "will", "expect",
"estimate", "anticipate", "intend", "believe" or "continue" or the
negative thereof or similar variations. The actual results and
performance of Cominar discussed herein could differ materially from
those expressed or implied by such statements. Such statements are
qualified in their entirety by the inherent risks and uncertainties
surrounding future expectations. Some important factors that could
cause actual results to differ materially from expectations include,
among other things, general economic and market factors, increased
indebtedness associated to the Offer, competition, changes in
government regulation and the factors described under "Risk Factors" in
the Annual Information Form of Cominar. The cautionary statements
qualify all forward-looking statements attributable to Cominar and
persons acting on its behalf. Unless otherwise stated, all
forward-looking statements speak only as of the date of this press
SOURCE COMINAR REAL ESTATE INVESTMENT TRUST
For further information:
Mr. Michel Dallaire, P.Eng.
President and Chief Executive Officer, Cominar Real Estate Investment Trust
Mr. Michel Berthelot
Vice President and Chief Financial Officer, Cominar Real Estate Investment Trust
(418) 681-6300 ext. 2266