- Presentation reiterates compelling rationale for the
acquisition plan set out in the management information
circular filed by Cominar November 24,
2021, as well as numerous key considerations that make
remaining as a publicly traded REIT a riskier proposition for
Unitholders.
- Offer by Canderel-led consortium represents a
63.2% premium to the closing Unit price on September 15, 2020, the last trading day prior to
the announcement of Cominar's Strategic Review Process and a 16.3%
premium to Cominar's 20-day volume-weighted
average price per Unit on the TSX for the period ending on
October 22, 2021, the last
trading day prior to the announcement of the Arrangement.
- Following a comprehensive 13-month Strategic Review Process,
the Arrangement has unanimous support of both the Board of Trustees
of Cominar and the Special Committee, comprised of independent
trustees, and represents the most favourable outcome from Cominar's
Strategic Review Process for Cominar, its Unitholders and other
stakeholders.
- Proxy voting deadline is 11:00
a.m. (Montréal time) on December 17,
2021
QUÉBEC CITY, Dec. 6, 2021 /CNW
Telbec/ - Cominar Real Estate Investment Trust ("Cominar" or
the "REIT") (TSX: CUF.UN) today announced that it has issued
a presentation for holders (the "Unitholders") of units of
Cominar (the "Units") reiterating the compelling reasons to
vote FOR the proposed arrangement (the "Arrangement")
pursuant to which all Units would be acquired for $11.75 per Unit in cash by a consortium led by an
affiliate of Canderel Management Inc. ("Canderel"),
providing certain value and immediate liquidity to Unitholders.
The presentation reiterates key information for Unitholders set
out in the management information circular filed by Cominar on
November 24, 2021 (the
"Circular"). The contents of the presentation are qualified
in their entirety by the Circular, and Unitholders are urged to
carefully review the Circular to fully understand the numerous
reasons to support the Arrangement and then vote FOR the
Arrangement prior to the proxy voting deadline of 11:00 a.m.
(Montréal time) on December 17, 2021.
The Circular is available at
https://www.cominar.com/en/investors/publications/ and under
Cominar's profile on SEDAR at www.sedar.com.
Under the terms of the Arrangement, the consortium led by
Canderel, a leading Canadian developer and manager, and which also
includes FrontFour Capital Group LLC ("FrontFour"), Artis
Real Estate Investment Trust ("Artis") and partnerships
managed by the Sandpiper Group ("Sandpiper"), with Koch Real
Estate Investments, LLC ("KREI") and Artis providing
preferred equity, would acquire the Units. In addition, under the
Arrangement, Groupe Mach Acquisition Inc. and Blackstone would
acquire certain assets of the REIT in off-take transactions.
The presentation, which is available at www.cominar.com,
reiterates the structure and rationale for the Arrangement and
details the comprehensive process and rigorous corporate governance
practices that led to the Arrangement. The presentation also
clearly explains the numerous considerations described in the
Circular that make attempting to pursue a status quo plan as a
publicly traded REIT a riskier proposition for Unitholders.
Key takeaways of the Arrangement include:
- The Arrangement represents the culmination of an extensive and
thorough strategic review process diligently pursued over 13 months
(the "Strategic Review Process");
- Broad set of alternatives reviewed including: (i) status quo;
(ii) select asset sales aimed at enhancing the status quo; (iii)
structural alternatives aimed at surfacing value from asset
classes; and (iv) a sale of the entire REIT;
- The Arrangement provides compelling value to Unitholders,
including certainty and immediate liquidity;
- The Arrangement represents the highest actionable proposal and
is the result of arm's-length negotiations following a robust
dual-track process;
- Desjardins Securities provided an independent valuation with a
fair market value range of $11.00-$12.50, in
addition to a fairness opinion, while National Bank Financial and
BMO Capital Markets each separately provided a fairness
opinion;
- The Arrangement represents the most favourable outcome from
Cominar's Strategic Review Process for Cominar, its Unitholders and
other stakeholders.
THERE ARE SIGNIFICANT CHALLENGES TO REMAINING A PUBLIC
REIT
The Strategic Review Process was driven in large part by the
structural challenges that Cominar faced in its operating
environment prior to the COVID-19 pandemic, which has only
exacerbated these challenges.
As part of the process, Cominar looked at options to maintain
the status quo and continue as a publicly traded REIT. Due to a
number of considerations, that path is challenging and riskier for
Unitholders. Those considerations described in the Circular
include:
- Cominar has the highest leverage level among Canadian REITs of
a similar size;
- The REIT has significant debt maturities of more than
$1 billion by the end of 2022;
- Cominar's liquidity is constrained by negative free cash flow
and limited potential to increase the mortgages on its assets,
Asset sales were considered as a way to enhance the status quo, but
come with their own challenges, including significant leakage from
factors such as tax, and A significant equity issuance may be
required to right-size the REIT's debt levels and provide
flexibility to pursue the REIT's status quo plan, which could
result in significant unitholder dilution.
Furthermore,
- It would require considerable time, capital investments, and
execution/market risks to potentially reduce the gap between
Cominar's unit price and its IFRS Net Asset Value (NAV) over time
or through an en bloc transaction;
- Unitholders should be aware that IFRS NAV is mainly based on
appraisals that assume a stabilized level of operations for each
property achieved over time, taken individually, under a private
real estate market context with no consideration given to the
broader financial situation of Cominar and the execution risks
associated with achieving stabilized operations, its public market
status as a diversified REIT and any potential breakup value and
leakage including mortgage defeasance and property brokerage fees,
or tax consequences, that could arise from attempting to sell
assets individually at the IFRS NAV;
- The REIT continues to be impacted by exposure to the challenged
brick-and-mortar retail sector, and there are uncertainties
regarding structural changes in office and retail sectors further
exacerbated by the COVID-19 pandemic;
- The structural challenges the REIT faces will remain even in a
better economic environment, Cominar requires meaningful
investments in key retail and office assets, and its industrial
assets also require investment to maintain their income generating
capabilities, and
- Meaningful investment would also be required to develop or
redevelop assets.
These considerations, as well as more that are detailed in
the presentation, limit the ability of the REIT to achieve its
long-term objectives and meaningfully enhance the status quo. The
value derived from the Arrangement is more favourable than what
could have been realized through the continuation of the status
quo.
Cominar Unitholders as of the close of business
on November 10, 2021 (the "Record Date") are entitled
to receive notice of, and to vote at, the special meeting of
Unitholders to be virtually held on December
21, 2021, at 11:00 a.m. (Montréal time) (the
"Meeting"). Only persons shown on the register of
Unitholders at the close of business on that date, or their duly
appointed proxyholders, will be entitled to attend the Meeting and
vote on the Arrangement Resolution (as defined in the Circular).
Each Unit entitled to be voted at the Meeting will entitle the
holder thereof as the Record Date to one vote at the Meeting in
respect of the Arrangement Resolution. For the Arrangement to
proceed, the Arrangement Resolution must be approved by not less
than two-thirds of the votes cast at the Meeting by Unitholders
virtually present or represented by proxy and entitled to vote at
the Meeting.
To be counted at the Meeting, proxies must be received by the
REIT's transfer agent, Computershare Trust Company of Canada, at 100 University Avenue, 8th Floor,
Toronto, Ontario M5J 2Y1,
Attention: Investor Services, Fax: 1-866-249-7775, not later than
11:00 a.m. (Montréal time) on December
17, 2021 (or no later than 48 hours, excluding Saturdays,
Sundays and holidays, before any reconvened meeting if the Meeting
is adjourned or postponed).
If Unitholders hold Units as an objecting beneficial owner
through an intermediary such as a broker, investment dealer, bank,
trust company, trustee, clearing agency (such as CDS) or other
nominee holder, and received a voting instruction form from your
intermediary or Broadridge Financial Solutions, Inc., they should
follow the instructions provided to ensure their vote is counted at
the Meeting.
Unitholders who have any questions or need assistance in
their consideration of the Arrangement or with the completion and
delivery of their proxy, are urged to contact the REIT's strategic
unitholder advisor and proxy solicitation agent, Kingsdale
Advisors, who can be reached by toll-free telephone in North America at 1-855-682-2031, by collect
call outside North America at
416-867-2272, or by email at contactus@kingsdaleadvisors.com.
ABOUT COMINAR
Cominar is one of the largest diversified real estate
investment trusts in Canada and is
the largest commercial property owner in the Province of Québec.
Our portfolio consists of 310 high-quality office, retail and
industrial properties, totalling 35.7 million square feet
located in the Montreal, Québec
City and Ottawa areas. Cominar's
primary objective is to maximize total return to Unitholders by way
of tax-efficient distributions and maximizing the Cominar value
through the proactive management of our portfolio. For additional
information, please visit www.cominar.com.
ABOUT CANDEREL
Canderel is one of Canada's largest privately held real estate
companies. It was founded over 46 years ago by Jonathan Wener and has since grown from its base
in Montreal to seven offices
across Canada. Canderel owns and
manages a real estate portfolio of more than 27 million square
feet in Canada's seven major
markets – Québec City, Montreal,
Ottawa, Toronto, Calgary, Edmonton and Vancouver. Its 650 real estate professionals
have executed more than $15 billion in acquisitions,
developments and management projects. For more information about
Canderel, please visit www.canderel.com.
ABOUT FRONTFOUR
FrontFour is a multi-strategy investment company based in
Greenwich, Connecticut. FrontFour
has a focus on value-oriented investments across both public and
private markets with significant experience within the broader real
estate sectors, including an accomplished track record in the
Canadian market.
ABOUT ARTIS
Artis is a diversified Canadian real estate investment trust
with a portfolio of industrial, office and retail properties in
Canada and the United States. Artis' vision is to build a
best-in-class asset management and investment platform focused on
growing net asset value per unit and distributions for investors
through value investing in real estate. For more information about
Artis, please visit www.artisreit.com.
ABOUT SANDPIPER
Sandpiper is a Vancouver-based
private equity firm focused on investing in real estate through
direct property investments and securities. For more information
about Sandpiper, visit www.sandpipergroup.ca.
ABOUT KREI
KREI is part of Koch Industries, one of the largest privately
held businesses in the United
States. KREI focuses its efforts on attractive risk-adjusted
capital deployment into real estate assets and operating companies.
KREI has an acute focus on best-in-class management teams and
flexible capital solutions which align interests to drive mutual
benefit with its partners. Since 2003, Koch companies have invested
nearly US$133 billion in growth and improvements. With a
presence in more than 70 countries, Koch companies employ 122,000
people worldwide. From January 2009
to present, Koch companies have earned more than 1,300 awards for
safety, environmental excellence, community stewardship,
innovation, and customer service.
ABOUT MACH
Mach Capital (www.machcapital.ca), an affiliate of Groupe Mach
Inc. (www.groupemach.com), is a closely held private equity firm.
Mach Capital does not have any limited partners nor are there any
exit strategies which condition its investment decisions. Mach
Capital's investment thesis is driven by working with founders and
their management teams to achieve sustainable profitability in the
best long-term interests of the company and its stakeholders.
With a portfolio of over 170 properties representing
approximately 30 million square feet and 10 million
square feet of land, Groupe Mach is one of the largest private real
estate owners and developers in Canada. Groupe Mach is currently developing
over 15 million square feet of space, including world-class
projects such as the Quartier des Lumières. Groupe Mach's real
estate holdings include some of Montreal's landmark buildings such as the Sun
Life Building, 1000 De La Gauchetière West, the CIBC
Tower, Place Victoria, Tour KPMG 600 De Maisonneuve West, as
well as numerous properties in Québec City and the Toronto area. Its integrated approach includes
real estate development, management, property services and
construction. In recent years, Groupe Mach has won numerous
national and international awards for its innovation in
sustainability, design and construction quality.
ABOUT BLACKSTONE REAL ESTATE
Blackstone is a global leader in real estate investing.
Blackstone's real estate business was founded in 1991 and has
US$230 billion of investor capital under management.
Blackstone is the largest owner of commercial real estate globally,
owning and operating assets across every major geography and
sector, including logistics, multifamily and single family housing,
office, hospitality and retail. Its opportunistic funds seek to
acquire undermanaged, well-located assets across the world.
Blackstone's Core+ strategy comprises open-ended funds that invest
in substantially stabilized real estate assets globally and
Blackstone Real Estate Income Trust, Inc. (BREIT), a non-listed
REIT that invests in U.S. income-generating assets. Blackstone Real
Estate also operates one of the leading global real estate debt
businesses, providing comprehensive financing solutions across the
capital structure and risk spectrum, including management of
Blackstone Mortgage Trust (NYSE: BXMT).
Caution Regarding Forward-Looking Statements
Certain statements made in this news release are forward-looking
statements within the meaning of applicable securities laws,
including, but not limited to, statements with respect to the
rationale of the Special Committee and the Board of Trustees for
entering into the arrangement agreement, the expected benefits of
the Arrangement, the timing of various steps to be completed in
connection with the Arrangement, and other statements that are not
material facts. Often, but not always, forward-looking statements
can be identified by the use of forward-looking terminology such as
"may", "will", "expect", "believe", "estimate", "plan", "could",
"should", "would", "outlook", "forecast", "anticipate", "foresee",
"continue" or the negative of these terms or variations of them or
similar terminology.
Although the REIT believes that the forward-looking statements
in this news release are based on information and assumptions that
are current, reasonable and complete, these statements are by their
nature subject to a number of factors that could cause actual
results to differ materially from management's expectations and
plans as set forth in such forward-looking statements, including,
without limitation, the following factors, many of which are beyond
the REIT's control and the effects of which can be difficult to
predict: (a) the possibility that the proposed Arrangement will not
be completed on the terms and conditions, or on the timing,
currently contemplated, and that it may not be completed at all,
due to a failure to obtain or satisfy, in a timely manner or
otherwise, required Unitholder, court and regulatory approvals and
other conditions of closing necessary to complete the Arrangement
or for other reasons; (b) risks related to tax matters, including
as regards the amount of ordinary income to be distributed by the
REIT; (c) the possibility of adverse reactions or changes in
business relationships resulting from the announcement or
completion of the Arrangement; (d) risks relating to the REIT's
ability to retain and attract key personnel during the interim
period; (e) the possibility of litigation relating to the
Arrangement; (f) credit, market, currency, operational, liquidity
and funding risks generally and relating specifically to the
Arrangement, including changes in economic conditions, interest
rates or tax rates; (g) business, operational and financial risks
and uncertainties relating to the COVID-19 pandemic; and (h) other
risks inherent to the REIT's business and/or factors beyond its
control which could have a material adverse effect on the REIT or
the ability to consummate the Arrangement.
Readers are cautioned not to place undue reliance on the
forward-looking statements and information contained in this news
release. Cominar disclaims any obligation to update any
forward-looking statements contained herein, whether as a result of
new information, future events or otherwise, except as required by
law.
SOURCE COMINAR REAL ESTATE INVESTMENT TRUST