* KingSett Capital consortium withdraws rival bid, joins H&R
* New cash-and-stock bid offers C$27.98 per Primaris unit
Feb 5 H&R Real Estate Investment Trust
sweetened its offer for Primaris Retail REIT, after
persuading rival bidders led by KingSett Capital to split
Primaris between them.
Units in Primaris, which has yet to react to the offer,
jumped 1.8 percent in early trade on the Toronto Stock Exchange
H&R raised its cash-and-stock offer by 2.4 percent to
C$27.98 per unit from its earlier bid of C$27.33 per unit,
valuing Primaris at about C$2.8 billion.
H&R will get Primaris' operating platform and 25 shopping
centers while the KingSett Capital-led consortium, which
includes the Ontario Pension Board and RioCan Real Estate
Investment Trust, will buy the remaining 18
properties in the Primaris portfolio.
Under the deal, RioCan, Canada's largest REIT, will buy two
malls in the greater Toronto area for C$362 million.
Primaris owns some 35 properties in cities across Canada,
including the Dufferin Mall in Toronto, the Cornwall Centre in
Regina, Saskatchewan, and the Tecumseh Mall in Windsor.
Its tenants include many Canadian household names such as
Hudson's Bay, Canadian Tire and Reitmans. It
also owns about 10 Zellers outlets, which are currently being
converted into Target stores.
H&R said the revised transaction will boost its funds from
operations, reduce its overall leverage ratio and increase
market capitalization and liquidity.
H&R and KingSett are entitled to a break-up fee of C$100
million as part of the deal.