Top firms advise investor group on $5.7 billion takeover of Cominar REIT

Cominar owns 310 office, retail and industrial properties in Quebec and Ontario

Top firms advise investor group on $5.7 billion takeover of Cominar REIT

Montreal-based Canderel Real Estate Property Inc. is leading an investor consortium to acquire Cominar Real Estate Investment Trust in an agreement worth $5.7 billion.

The investor group includes U.S.-based FrontFour Capital Group LLC and Koch Real Estate Investments LLC (KREI), as well as Canadian real estate businesses Artis Real Estate Investment Trust, Sandpiper Group and Group Mach. The consortium will acquire Cominar for a consideration of $11.75 in cash per unit, which implies an equity value of $2.2 billion and an enterprise value of $5.7 billion. Group Mach will also buy $1.5 billion of retail and office properties as part of the agreement.

Top law firms are advising on the deal. Davies Ward Phillips & Vineberg LLP and Fasken Martineau DuMoulin LLP are acting as legal advisors to Cominar. Stikeman Elliott LLP and McCarthy Tétrault LLP are acting for Iris Acquisition II LP, the purchaser entity created by the consortium. Norton Rose Fulbright Canada LLP is acting as legal advisor to Artis and Sandpiper. Osler Hoskin & Harcourt LLP represents KREI. Borden Ladner Gervais LLP is acting for Mach.

Cominar owns a portfolio consisting of 310 office, retail and industrial properties across the Montreal, Quebec City, and Ottawa areas. The acquisition came after the company announced in March that its net operating income losses due to pandemic-related disruptions are estimated to be $35.8 million.

"This Transaction is the result of our extensive and thorough Strategic Review Process under which a broad set of alternatives aimed at enhancing unitholder value were evaluated by the Special Committee of the Board of Trustees. We believe that this transaction provides significant value, certainty, and liquidity to our unitholders and we are confident that it is in the best interests of Cominar," said René Tremblay, chairman of Cominar’s board of trustees.

The investor group is led by Canderel, a privately held real estate company with a property portfolio of more than 27 million square feet across Quebec City, Montreal, Ottawa, Toronto, Calgary, Edmonton and Vancouver. The company has executed more than $15 billion in acquisitions, developments and management projects.

Brett Miller, CEO of Canderel said, “This transaction will provide significant benefits to key stakeholders, including tenants of Cominar, by leveraging the resources of the Canderel platform and a Québec-led group of investors with a long-term perspective to unlock opportunities for growth and development in the communities where Cominar operates."

The transaction is expected to close in the first quarter of 2022.

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