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 Quebec real estate fund.
“Negotiations between Cominar and the buyers spanned 13 months,” Cossette said during a third quarter results conference call. The offer was the best and highest received during this process. The company accepted last week the offer of a consortium led by Canderel to acquire 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 PressJonathan Kelcher of TD Securities says 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 bid should be at least $ 12.10 per unit, or $ 11.80 plus a breach fee of $ 0.30 per unit.
The offered price, lower than the net asset value per unit, raises questions among financial analysts. Cominar reports a net asset value of $ 14.72 per unit for the first nine months of the year, while the offer is $ 11.75.
Mr. 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 largest since 2010, again according to 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 in his responses to questions from analysts, who wanted to know more about the spread between the net asset value and the bid price.
In general, he mentioned that expected investment spending and debt could partly explain the difference.