UPDATE 2-KEYreit board rejects Huntingdon Capital's partial bid

Fri Feb 15, 2013 2:04pm EST
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* KEY calls on unitholders to reject Huntingdon proposal

* Says offer is inadequate, coercive and opportunistic

* To hold special unitholder meeting to approve poison pill

By Euan Rocha

TORONTO, Feb 15 (Reuters) - KEYreit, a real estate investment trust that owns small retail properties across Canada, on Friday rejected an unsolicited partial takeover bid from Huntingdon Capital Corp, saying the proposal was inadequate and coercive.

Richmond, British Columbia-based Huntingdon, which already owns 5.4 percent of KEY's issued and outstanding trust units, made its offer in January. It wants to acquire a further 6.6 million, or 45 percent, of KEY's units for C$7 each in cash.

"The partial offer fails to provide unitholders with an appropriate control premium for the units purchased, and provides no premium for units not purchased," Donald Biback, who heads KEY's board of trustees, said in a statement on Friday.

KEY's units have jumped more than 8 percent since the offer was announced, but as the offer is only a partial bid, the units continue to trade at C$6.70, well below the offer price.

This is the second takeover battle involving Canadian real estate investment trusts in a span of two months.   Continued...