Fortis to explore sale, spin-out of hotels and other real estate assets
TORONTO (Reuters) - Fortis Inc (FTS.TO: Quote) said on Friday it has retained advisors to explore a sale, or spin-out of its hotel and commercial real estate business now operated and controlled by its wholly owned subsidiary Fortis Properties Corp.
The St John's Newfoundland and Labrador-based utility firm said Fortis Properties operates some 23 hotels in eight Canadian provinces, including properties for brands such as the Sheraton, Delta, Hilton, Holiday Inn, Ramada and Best Western.
It also controls some 2.8 million square feet of commercial and retail real estate, primarily in Atlantic Canada.
The assets generated revenues of about $250 million and had earnings before interest, taxes, depreciation and amortization of about $80 million in 2013.
The review of Fortis Properties will explore various options for the non-utility subsidiary, the company said, including but not limited to "a sale of all or a portion of the assets, a sale of shares of Fortis Properties or an initial public offering."
Fortis has engaged CIBC and CBRE as its financial advisors. The process is expected to begin in the coming weeks and is set to continue through the balance of 2014 and into 2015.
Shares in Fortis were up 1.4 percent at C$34.61 ($31.03) on the Toronto Stock Exchange on Monday, following the announcement.
(Reporting by Euan Rocha; Editing by Grant McCool)
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