Desjardins Securities analyst Jeff Roberts isn’t ruling out Cominar Real Estate Investment Trust acquiring BTB REIT, despite the latter’s current rejection of any deal. Cominar said it had approached BTB, a Quebce-based REIT with a market capitalization of $30-million, but was rebuffed by management. Cominar is not interested in a hostile takeover attempt.
Mr. Roberts said he believed the capitalization rate on the deal would have been about 8.8%, about the same price Cominar paid to buy Overland Realty Ltd. this week — part of move into Atlantic Canada for the Quebec City-based REIT.
“Because BTB’s management does not wish to negotiate a sale to Cominar, AM Total Investments, a company owned by the Dallaire family who are the founders and largest unitholders of Cominar, announced that it intends to sell its entire 19.7% stake in BTB, which should pressure BTB’s unit price.,” said Mr. Roberts.
The analyst said most of BTB’s 43 properties, which consist of 2.3 million square feet of diversified properties mostly in Quebec, would have fit in well with Cominar’s portfolio. Mr. Roberts predicts Cominar will still be able to acquire about $150-million to $200-million of accretive properties in 2010, despite missing out on BTB.
Plus, he added, the chase of BTB may be just on hold.
“Cominar’s management is patient and conservative, and may eventually acquire BTB. In the meantime, between other acquisitions and sizeable internal development projects, Cominar should continue its brisk expansion while growing its cash flow per unit,” said Mr. Roberts.