TORONTO (Reuters) - Primaris Retail REIT’s PMZ_u.TO chief executive said on Thursday the company is in the process of hiring financial advisers, a day after receiving a C$2.6 billion ($2.63 billion) takeover bid from a consortium led by KingSett Capital.
CEO John Morrison said the Primaris board would give the Canadian real estate investment trust’s unitholders its opinion of the bid once it receives a formal offer.
If KingSett succeeds it will win control of mid-market retail centers in major cities across the country and dominant shopping malls in secondary cities.
Morrison, in an interview with Reuters on Thursday, said Jon Love, his counterpart at KingSett, only informed him about the proposal in a conversation late on Tuesday.
“It was a very informal. It was ‘we are going to make a bid for Primaris and we are going to issue a press release tomorrow morning,'” said Morrison. “I listened and he talked. It was very brief.”
The bid for Primaris comes at a time when U.S. retailers are looking to expand northward and are vying for prime retail real estate assets in the country.
Primaris, formed in 2003, owns more than 30 properties in cities across Canada, including the Dufferin Mall in Toronto, the Cornwall Centre in Regina, Saskatchewan, the Tecumseh Mall in Windsor, Ontario, the Woodgrove Centre in Nanaimo, British Columbia, and the Cornwall Centre in Regina, Saskatchewan.
Its tenant list includes household names such as Hudson’s Bay, Canadian Tire (CTC.TO), Reitmans RET.TO, Sears Canada SCC.TO, Target, Shoppers Drug Mart Corp SC.TO and others.
Morrison said Primaris aims to have an independent financial adviser retained by Thursday to review the formal proposal once the REIT receives it.
He declined to say on whether Primaris would explore strategic alternatives to the unsolicited offer.
The KingSett proposal is supported by a C$1.1 billion side deal with RioCan Real Estate Investment Trust, Canada’s largest REIT. RioCan has agreed to buy some of the Primaris assets after the close of the proposed transaction.
KingSett and its affiliates own about 6.88 million units of Primaris, representing about 7 percent of issued and outstanding units, making them one of the top unitholders in the company.
($1 = 0.9894 Canadian dollars)
Reporting by Euan Rocha; Editing by Frank McGurty and Richard Chang