February 5, 2013 / 1:52 PM / 5 years ago

Canada's H&R sweetens Primaris bid as KingSett consortium joins fray

TORONTO, Feb 5 (Reuters) - H&R Real Estate Investment Trust said on Tuesday it has amended and sweetened its offer for Primaris Retail REIT, after the KingSett Capital-led consortium opted to withdraw its rival bid and participate in the H&R bid.

The restructured cash-and-equity deal will now include a larger cash consideration and offers Primaris unitholders a fully prorated consideration of C$27.98 per unit. On the same basis H&R’s earlier bid was worth C$27.33 per unit.

The new offer values Primaris at about C$2.83 billion and it is slightly sweeter that H&R’s earlier friendly bid worth C$2.76 billion.

H&R said the revised transaction will be boost the firm’s funds from operations, reduce its overall leverage ratio and increase market capitalization and liquidity.

As part of the deal, H&R is acquiring Primaris’ operating platform together with 25 shopping centers, while the KingSett Capital-led consortium will acquire the remaining 18 properties in the Primaris portfolio.

Primaris owns some 35 properties in cities across Canada, including the Dufferin Mall in Toronto, the Cornwall Centre in Regina, Saskatchewan, and the Tecumseh Mall in Windsor.

Its tenants include many Canadian household names such as Hudson’s Bay, Canadian Tire and Reitmans. It also owns about 10 Zellers outlets, which are currently being converted into Target stores.

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