Cominar announces acquisition of units of Canmarc and intention to make an all-cash offer

    




 Offer Highlights 




        --  Unitholders of Canmarc Real Estate Investment Trust ("Canmarc")
            to receive $15.30 in cash per Canmarc Unit (as defined below),
            not subject to proration
        --  All-cash offer represents a premium of 15.2% over the closing
            price of the Canmarc Units on November 25, 2011
        --  Opportunity for Canmarc unitholders to participate in the
            growth of the combined entity through a unit election option,
            capped at 16 million units (the "Cominar Units") of Cominar
            Real Estate Investment Trust ("Cominar")
        --  Combined entity ideally positioned for growth, with a unique
            portfolio of high-quality real estate comprising approximately
            30 million square feet, attractive geographical and asset-class
            diversification and an enhanced capital markets profile
        --  Transaction immediately accretive to Cominar's distributable
            income, funds from operations and adjusted funds from
            operations
        --  Cominar and its subsidiaries own approximately 15.1% of the
            total issued and outstanding Canmarc Units




 QUÉBEC CITY, Nov. 28, 2011 /CNW Telbec/ - Cominar   announced today the purchase, by way of a private agreement (the "Purchase Agreement"), of a total of 3,099,300 Canmarc Units, representing 5.7% of the  total issued and outstanding Canmarc Units. 

 As of the date hereof, Cominar and its subsidiaries own approximately  15.1% of the total issued and outstanding Canmarc Units, making Cominar  the second-largest unitholder of Canmarc, based on publicly-available  information. 

 Intention to Make an Offer 

 Cominar also announced today that it intends to make an offer to  purchase, through wholly-owned subsidiaries, all of the issued and  outstanding trust units of Canmarc (the "Trust Units"), together with any associated rights (the "URP Rights", and together with the Trust Units and the Trust Units that may become  issued and outstanding upon the exercise, conversion or exchange of  securities convertible into or exchangeable for Trust Units,  collectively, the "Canmarc Units") that Cominar and its subsidiaries do not already own (the "Offer"). 

 Cominar approached the Board of Trustees of Canmarc to pursue a  supported transaction. Canmarc has advised Cominar that it is not  prepared to enter into such discussions. 

 Pursuant to the Offer, the unitholders of Canmarc will receive $15.30 in  cash per Canmarc Unit (the "Cash Alternative"), not subject to proration. Alternatively, Cominar proposes to offer  Canmarc unitholders the opportunity to participate in the growth of the  combined entity via a unit election option pursuant to which Canmarc  unitholders would exchange each Canmarc Unit they hold for 0.7054 Cominar Units (the "Unit Alternative"), with an aggregate maximum of 16 million Cominar Units available  pursuant to this option, subject to proration. 

 The Offer, which was unanimously approved by Cominar's Board of  Trustees, is expected to be immediately accretive to Cominar's  distributable income, funds from operations and adjusted funds from operations per Cominar  Unit. 

 The Offer is not subject to a vote by Cominar unitholders. 

 Pursuant to the Purchase Agreement, Cominar agreed with the vendor of  such Canmarc Units that if, within a 180-day period starting as of the  date hereof, Cominar, or any of its affiliates, completes the Offer for  consideration to the unitholders of Canmarc in excess of $15.30 per  Canmarc Unit, it would pay the vendor the difference between such  offered consideration and $15.30. 

 The Cash Alternative 

 The all-cash purchase price under the Cash Alternative represents a  premium of 15.2% over the closing price of $13.28 per Canmarc Unit on  November 25, 2011, the last trading day prior to the announcement of  the Offer. 

 The consideration under the Cash Alternative provides Canmarc  unitholders with certainty of value and immediate liquidity, and  removes the risk associated with the continued ownership of Canmarc  Units. 

 The Offer is not subject to any financing condition. National Bank of  Canada, Bank of Montreal and Caisse Centrale Desjardins have provided  Cominar with a commitment to fund the entire consideration payable for  the Canmarc Units and back-stop post-closing refinancing and liquidity  requirements. 

 The Unit Alternative 

 Based on the exchange ratio offered under the Unit Alternative and  before any proration of the unit consideration, the monthly cash  distributions to Canmarc unitholders electing the Unit Alternative are  expected to increase by approximately 6.9%. 

 Additionally, Canmarc unitholders electing the Unit Alternative will  have the opportunity to participate in the future upside of Cominar.   The acquisition of Canmarc is expected to significantly enhance  Cominar's profile by providing it with the following benefits: 




      1. Addition of high-quality, complementary portfolio of properties:
         The acquisition of Canmarc will provide Cominar with an additional
         8.8 million square feet of high-quality real estate that is
         complementary to its existing portfolio. Combined with Cominar's
         existing properties, the addition of Canmarc's assets will create
         a unique portfolio of high-quality properties including a number
         of landmark buildings.

      2. Enhanced size and diversification: The acquisition of Canmarc will
         increase Cominar's asset base by approximately 42% to
         approximately 30 million square feet, with an enhanced footprint
         in the Province of Québec and a meaningful presence in the
         Maritimes, western Canada and Ontario. Furthermore, Cominar's
         portfolio will benefit from enhanced diversification among the
         office, retail and industrial asset classes.

      3. Improved capital markets profile: The acquisition of Canmarc will
         increase Cominar's enterprise value to $4.4 billion, creating the
         second-largest diversified REIT in Canada, while increasing
         liquidity for Cominar unitholders.  Accordingly, Cominar will
         benefit from stronger access to capital.

      4. Lower cost of capital:The increased size and enhanced geographic
         and asset class diversification resulting from the acquisition of
         Canmarc is expected to allow Cominar to benefit from a lower cost
         of capital, thus improving its competitiveness for future asset
         and portfolio acquisitions.

      5. Positioned for further growth: The combined entity will be ideally
         positioned to execute Cominar's continued expansion in its key
         markets and in the Ontario market.

      6. Synergies: Given the scale of its existing operations in Québec,
         Cominar expects to realize synergies from the combination of the
         two entities. Cominar's knowledge of the key markets in which
         Canmarc operates is expected to result in lower operating costs
         and improved operating efficiencies, creating further synergies
         for Cominar.

      7. Immediately accretive: The transaction is expected to be
         immediately accretive to distributable income, funds from
         operations and adjusted funds from operations.  The accretion to
         adjusted funds from operations is in turn expected to result in a
         decreased payout ratio for the combined entity.




 Mr. Michel Dallaire, Cominar's President and Chief Executive Officer,  said: "The Canmarc assets are highly complementary to Cominar's  existing portfolio.  With a unique base of high-quality properties  benefiting from increased scale and diversification, as well as a  significantly-enhanced capital markets profile, Cominar will be  ideally-positioned to continue its geographic expansion." 

 Pro Forma Cominar Leverage  

 While the Offer will require Cominar to temporarily increase its  leverage, Cominar intends to align its capital structure with its  long-term objectives over time. 

 Mr. Robert Després, Chairman of Cominar's Board of Trustees, said:  "Cominar's historically conservative approach to leverage has provided  it with the financial flexibility to pursue attractive investment  opportunities such as the acquisition of Canmarc. Cominar's Board of  Trustees is confident that management will successfully reduce  Cominar's leverage in due course through access to attractive capital,  reflecting its enhanced scale and geographic and asset class  diversification." 

 Additional Details on the Offer 

 Cominar's takeover bid will be made available to unitholders of Canmarc  following receipt of a complete unitholders' list from Canmarc or  earlier by publication of an advertisement of the takeover bid. The  Offer will be subject to certain conditions outlined in the definitive  offer documentation that Cominar expects to file in the near future  with Canadian securities regulatory authorities. 

 This press release does not constitute an offer for or solicitation of  Canmarc Units in any jurisdiction.  Any such solicitation would be made  only by formal offer and only in those jurisdictions where Cominar may  legally do so. 

 BMO Capital Markets is acting as financial advisor to Cominar. Davies  Ward Phillips & Vineberg LLP is acting as legal counsel to Cominar. 

 PROFILE as at November 28, 2011 

 Cominar is the largest commercial property owner in the Province of  Québec. Cominar owns a real estate portfolio of 269 high-quality  properties, consisting of 53 office, 55 retail and 161 industrial and  mixed-use buildings that cover a total area of 21.0 million square feet  in the Greater Québec City, Montréal and Ottawa-Gatineau areas as well  as in the Atlantic Provinces. Cominar's objectives are to deliver  growing cash distributions payable monthly to its unitholders and to  maximize unitholder value by way of integrated management and the  expansion of its portfolio. 

 Forward-Looking Statements 

 This press release may contain forward-looking statements with respect  to Cominar and its operations, strategy, financial performance and  financial condition. These statements generally can be identified by  the use of forward-looking words such as "may", "will", "expect",  "estimate", "anticipate", "intend", "believe" or "continue" or the  negative thereof or similar variations. The actual results and  performance of Cominar discussed herein could differ materially from  those expressed or implied by such statements. Such statements are  qualified in their entirety by the inherent risks and uncertainties  surrounding future expectations. Some important factors that could  cause actual results to differ materially from expectations include,  among other things, general economic and market factors, increased  indebtedness associated to the Offer, competition, changes in  government regulation and the factors described under "Risk Factors" in  the Annual Information Form of Cominar. The cautionary statements  qualify all forward-looking statements attributable to Cominar and  persons acting on its behalf. Unless otherwise stated, all  forward-looking statements speak only as of the date of this press  release. 

COMINAR REAL ESTATE INVESTMENT TRUST


CONTACT:  Mr. Michel Dallaire, P.Eng.President and Chief Executive Officer, Cominar Real Estate InvestmentTrust(418) 681-8151Mr. Michel BerthelotVice President and Chief Financial Officer, Cominar Real EstateInvestment Trust(418) 681-6300 ext. 2266 


    

Copyright