March 19 Dundee Industrial REIT said it would buy C2C Industrial Properties Inc in a stock deal that values C2C at C$226 million ($221 million) to diversify its portfolio and expand its presence mainly in Ontario.
The deal will add more than 2.5 million square feet of gross leasable area in Halifax, Edmonton, Greater Toronto Area and Greater Montreal Area to Dundee Industrial's portfolio of 158 properties.
The offer price of C$4.85 per C2C share is based on Dundee Industrial's 10-day average trading price on the Toronto Stock Exchange, the companies said. The offer is at a 31 percent premium to C2C's Monday close on the Toronto Venture Exchange.
Shares of C2C, which began reviewing strategic options in December, rose 28 percent to C$4.70 on Tuesday morning.
Dundee Industrial said the deal will reduce its exposure to any one tenant, region or industry sector and will be immediately accretive.
The C2C portfolio, with a current occupancy rate of 96 percent, is an "ideal strategic fit," Dundee Industrial REIT Chief Executive Scott Hayes said in a statement.
C2C shareholders will own about 11 percent of Dundee Industrial once the transaction is completed.
GMP Securities advised C2C on the deal.
C2C has agreed not to solicit alternative proposals and has agreed to pay a break fee of C$4 million if it opts for a superior proposal.
Shares of Toronto-based Dundee Industrial were trading down 1 percent at C$10.77 at midday.