Plazacorp to Take Over KEYreit
It was thought Huntingdon Capital had the inside track, but yesterday Plazacorp Retail Properties announced an agreement with KEYreit to purchase all the issued and outstanding trust units of the small-box retail property owner. (Between betting on Huntingdon and predicting Calgary would win the Cup, we're having a rough year.)
John Bitove is the CEO of KEYreit. Plazacorp is a mutual fund corporation and one of Atlantic Canadas leading retail property owners and developers. The deal is valued at $320M (Plazacorp is also assuming debt)--or $8 per KEYreit unit (KEYreit traded at $7.67 at close of the TSX yesterday). Huntingdon had submitted an amended offer of $7.50/unit for 100% of KEYreit units on March 15.
Plazacorp president and CEO Michael Zakuta tells us the company had been following KEYreit for awhile. We renewed our discussions following the Huntingdon bid, he says. KEYreit owns 226 properties in nine provinces across Canada. Plazacorps current portfolio includes interests in 118 properties totaling 5.2M SF--including a mix of strip plazas, smallbox retail outlets and enclosed shopping centres. Both companies have Shoppers Drug Mart as a large tenant. We have both specialized in smaller footprint retail properties, Plazacorp chairman Earl Bewer says. Says Michael: We like the geographical fit of the KEYreit portfolio. We can apply our re-development expertise and experience and add value to the portfolio.
