(Quebec) Cominar met with “many” potential buyers before accepting Canderel’s offer after a process that lasted more than a year, says Sylvain Cossette, President and CEO of the real estate fund of Quebec.
“Negotiations between Cominar and the buyers spanned 13 months,” Cossette said during a conference call to discuss third quarter results. The offer was the best and highest received in this process. ”
The company last week accepted an offer with a consortium led by Canderel for an acquisition at a unit price of $ 11.75 per share, which represents a value of 5.7 billion including debt.
Despite rumors of a competing offer reported by La Presse, Jonathan Kelcher of TD Securities believes it is highly unlikely that such a proposal will emerge. “The interested parties would have come forward during this 13-month period,” he says. He notes that a competing offer should be at least $ 12.10 per unit, or $ 11.80 plus a contract breach fee of $ 0.30 per unit.
The bid price lower than the net asset value per unit raises questions with financial analysts. Cominar reports a net asset value of $ 14.72 per unit for the first nine months of the year compared to an offer of $ 11.75.
Ms. Kelcher notes that normally the purchase of a diversified real estate fund is made at a premium of 20% on the value of its net assets, according to a review made since 2004. The discount on the value granted to the purchaser would be the most significant since 2010, still based on data from TD Securities.
Pammi Bir, of RBC Capital Markets, called the offer “not very exciting” in a comment last week. “That being said, we believe it reflects the challenges that Cominar has to deal with, particularly in shopping centers. ”
Mr. Cossette was miserly on details when asked by analysts who wanted to know more about the difference between the value of the net assets and the price offered. In general, he mentioned that expected investment spending and debt could partly explain the difference. He has said on several occasions that management will disclose more information about the transaction in possible regulatory documents.
The circular to shareholders is expected to be sent out the week of November 22 for a meeting scheduled for December 21. Management anticipates the transaction will close in the first quarter of 2022.
In the third quarter, operating funds per unit rose 13% to $ 0.28 from the same period last year. Before the results were released, analysts polled by Refinitiv had expected a lower amount of $ 0.27 per unit.