UPDATE 4-KingSett leads unsolicited $2.6 bln bid for Primaris

Wed Dec 5, 2012 6:28pm EST
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* Unsolicited bid offers 12.8 pct premium to Tuesday's close

* Move comes as U.S. retailers look to expand in Canada

* Primaris' unit price surges on the TSX

* Primaris urges unitholders to sit tight act on offer (Adds background, analyst comment; updates share price move)

By Euan Rocha

TORONTO, Dec 5 (Reuters) - A consortium led by Canada's KingSett Capital will offer about C$2.6 billion ($2.62 billion) to acquire Primaris Retail REIT to bolster its portfolio of Canadian shopping malls at a time when U.S. retailers are looking to expand northward.

The unsolicited offer, announced by the private equity firm on Wednesday, would give KingSett control of mid-market retail centers in major cities across Canada and dominant shopping malls in secondary cities. The Ontario Pension Board is one of the consortium's members.

The consortium, which includes the Ontario Pension Board, is set to make a cash bid worth C$26 per unit. The offer represents a premium of 12.8 percent to Primaris Real Estate Investment Trust's Tuesday closing price of C$23.04 on the Toronto Stock Exchange. Including the assumption of debt, the transaction is valued at about C$4.4 billion.

Primaris units, which previously touched an all-time high of C$24.93 in August on the TSX, surged about 15 percent to C$26.50 in early trading, indicating that investors were expecting a sweetened offer or rival bid to emerge.   Continued...