(September 1 – 11:10 ET) – Contrary to the recent trend in the REIT business, a friendly deal has just been announced between Canadian Real Estate Investment Trust and Avista Real Estate Investment Trust. It’s a $600 million stock deal that will create the country’s second-biggest REIT with over $1 billion in combined assets.
CREIT is offering 0.76 units of CREIT for each unit of Avista, valuing
Avista at $9.46 per unit, a 15% premium over its last close. Avita
unitholders will be allowed to elect to do the deal on a tax-free rollover
or to record the tax cost at the exchange.
The deal is subject to regulator and shareholder approval. The two REITs
have agreed to vote on it by October 15, but haven’t set specific meeting
dates yet. They have also agreed to a possible $4 million breakup fee if the
deal falls apart.
The REITs claim that the deal will accrete immediately, and also
add the benefits of economies of scale, a high-quality, diversified
portfolio and prudent debt levels.
-IE Staff
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