Supported in particular by the vote of the largest unitholder and that of the Caisse de dépôt et placement du Québec, the consortium led by Canderel obtained the necessary support at the general meeting on Tuesday to buy Cominar.
The transaction was approved in a proportion of 83% of the votes cast during a virtual extraordinary meeting lasting barely twenty minutes.
“Given the circumstances and the current context, Ivanhoé Cambridge has decided to follow Cominar’s recommendation and vote in favor of the arrangement,” said Ivanhoé Cambridge’s spokesperson, Justine Lord-Dufour.
“Subject to the approval of the transaction by the Superior Court of Quebec on Thursday [demain], this transaction will allow us, in the long term, to reinvest in Quebec real estate, thus continuing the linchpin of our portfolio. ”
Through Ivanhoé Cambridge, the Caisse de dépôt held an interest of nearly 5% in Cominar.
After hesitating in recent weeks, businessman George Armoyan – the largest unitholder with a 9.7% stake – backed the deal. “I felt that several institutions wanted the transaction to go through. I didn’t want to be the one to put sand in the gear. The easy part is to oppose, ”he said in an interview.
George Armoyan adds that he feared a short-term decline in the stock and did not want to bear the burden of the failure of the trade. He specifies that he would have liked to be able to be involved in a turnaround in Cominar’s activities, but that he has just accepted the position of interim CEO of Calfrac, a Calgary-based company specializing in hydraulic fracturing.
“I can’t be everywhere at the same time,” he says.
Cominar revealed on October 24 an agreement with a consortium led by Canderel surrounding its sale at a unit price of $ 11.75 per share, an agreement valued at 5.7 billion including debt.
As part of this transaction, Groupe Mach must acquire certain commercial and office buildings, while the American investment firm Blackstone must recover 190 industrial buildings.
While institutional investor Letko Brosseau has publicly opposed the transaction in recent weeks, the two major voting advisory firms ISS and Glass Lewis recommended supporting the proposed transaction.
The arrangement reached with the consortium led by Canderel came at the end of a strategic review process lasting more than 13 months, notably launched due to financial difficulties at Cominar and when the pandemic caused additional uncertainty surrounding the activities.
Cominar’s management explained that the strategic review was mainly motivated by “structural challenges” exacerbated by the pandemic.
The unitholders had thus been warned that maintaining the listing on the stock exchange involved “important” issues.
A “significant” issue of shares could therefore be necessary, according to management, to “better calibrate” the debt levels and improve the flexibility to ensure the continuation of activities as a public company, which could lead to dilution. “Significant” to the equity of unitholders.
Cominar executives were unavailable for comment on Tuesday. The chairman of the board of trustees, René Tremblay, simply underlined in a press release that he would like to “thank the unitholders for their support over the years and in connection with the proposed arrangement”.
During the review process, Cominar’s advisers claim to have formally approached 33 parties (25 financial investors and 8 strategic investors) potentially interested in all or portions of the business. Seven financial investors and three strategic have signed confidentiality agreements allowing for due diligence, it is said.
Claiming to hold a 3.3% stake in Cominar, Letko Brosseau notably pointed out that the time seemed ill-suited to sell the company since Cominar is just emerging from the pandemic which has led to long closures of shopping centers and offices in 2020. and in 2021.
Reached by phone, Peter Letko was visibly disappointed. “What can we say? The business is sold. It’s a bit sad. Views and opinions differ from investor to investor. ”
Cominar owns 310 industrial, commercial and office buildings in Quebec and Ontario.
The sale of Cominar is undoubtedly the commercial real estate transaction of the year in Quebec and possibly the most important ever in the province.
Cominar’s real estate portfolio includes properties such as Gare Centrale de Montréal, Mail Champlain, in Brossard, Place Longueuil, Centropolis, Laval, Complexe Jules-Dallaire and Place de la Cité, in Quebec.