After the independent voting advisory agency ISS last week, it is the turn of the Glass Lewis agency to recommend that holders of Cominar units vote in favor of the proposed sale of the Quebec real estate investment trust. in October.
Glass Lewis considers “reasonable” the process of evaluating the alternatives carried out before reaching a sale agreement. “There is no reason to doubt that the proposed transaction is not the most favorable for the holders of shares currently”, we read in the decision issued by the firm and obtained by La Presse.
In addition, it is specified, Cominar’s share has not closed a single session above the price offered in the offer since the announcement of the agreement, which suggests that the market does not expect not until a better deal emerges.
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, a transaction valued at 5.7 billion including debt.
The offer represents a 63% premium over the closing price on the last trading day preceding the disclosure of the proposed transaction.
As part of this transaction, the consortium is to resell commercial and office buildings to Groupe Mach and some 190 industrial buildings to the US investment firm Blackstone.
Like ISS, Glass Lewis said he was worried “a little” about the bid price which reflected a significant discount from the net asset value at the time of the announcement which stood at $ 14.72 per unit. Glass Lewis adds, however, that while the transaction announcement comes at a time when the stock has not fully recovered from the impacts of the pandemic, the stock traded at a significant discount to the equity value of its assets at the time. recent years and that Cominar is facing a difficult and uncertain market environment with its office and commercial buildings.
Montreal asset manager Letko Brosseau, who owns a 3.3% stake in Cominar, has publicly opposed the transaction in recent weeks, stressing in particular that “the time seems ill-suited to make this proposal since Cominar is emerging. barely from the pandemic which led to long closures of shopping malls and offices in 2020 and 2021. Cominar’s stock has dropped significantly from its pre-pandemic level and has not yet recovered all the ground lost “.
While Cominar has come under criticism in recent weeks, La Presse revealed that at least two different groups are trying to put together competing offers ahead of the special meeting of unitholders scheduled for December 21.
The arrangement concluded by 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.
During the review process, Cominar’s advisers formally approached 33 parties (including 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.
Cominar owns 310 industrial, commercial and office buildings in Quebec and Ontario.