Despite the disagreements, Cominar’s unit owners finally agreed, Tuesday, to sell the real estate giant to the Canderel Group and Partners. If the court gives the green light, it will be the largest commercial real estate deal in Quebec history.
At an extraordinary meeting on Tuesday, unit owners voted 82.76% in favor of the deal, which will now be analyzed by the Quebec Supreme Court on December 23.
In recent weeks, businessmen and major shareholders of the fund have publicly expressed their dissatisfaction at $11.75 per share.
Among many, institutional director Letko Brousseau et Associés was among those who considered the offer absurd.
To many, this $5.7 billion proposal, including debt, was an understatement of the group’s true value. It must be said that in 2020, Cominar shares were trading at more than $15 in the stock markets.
major debts
In early December, the REIT, which owns 310 properties, issued a press release inviting unit owners to vote in favor of the offer, which was also recommended by Cominar’s Board of Trustees.
Then the administration spoke of “significant debts” amounting to more than a billion dollars due before the end of 2022. In recent months, due to the pandemic, the value of many properties has plummeted.
Ivanhoé Cambridge, which owns a 4.64% stake in Cominar, voted in favor of the arrangement with Canderel Group.
“This transaction will allow us, in the long term, to reinvest in Quebec real estate, thus continuing the focus of our portfolio,” company spokeswoman Justine Lord Dufour said in an email.
Since September 2020, Cominar has been analyzing various scenarios to ensure its financial health and increase the value of shares for its shareholders.
If the deal is approved by the court, Groupe Mach of Montreal will spend $1.5 billion to acquire 42 commercial and office properties, or 25% of Cominar’s portfolio.
The industrial division would end up in the hands of the American company Blackstone. It represents 35% of the fund’s assets.
The Canderel Group and its partners FrontFour, Koch, Artis and Sandpiper will retain the other properties. The management has already stated that it wants to continue and improve some of Cominar’s real estate projects. It also plans to open an office in Quebec and keep the Cominar name.
In 2019, the fund envisioned building approximately 10,000 housing units at ten of its sites.
This transaction must be concluded during the first quarter of 2022. The agreement provides in particular for the sale of Place de la Cité (Quebec), Mail Champlain (Brossard), Center Rockland (Montreal), Centropolis (Laval) and Montreal Central Station.
This deal should allow the five largest members of Cominar’s management to make close to $10 million. President and CEO Sylvain Cossett can receive compensation of $5.2 million.