Deal Would Make Calgary-based Real Estate Trust One of Canada's Largest Landlords

CALGARY — A Calgary-based real estate trust would control one the largest collections of rental apartments in Canada under a three-way deal involving nearly 25,000 residential suites in eight provinces and two territories.

Under the proposed deal, Northern Property Real Estate Investment Trust of Calgary will acquire True North Apartment Real Estate Investment Trust of Toronto.

Northern would also acquire a 4,650-suite portfolio of multi-family properties from Starlight Investments Ltd., which is controlled by True North chairman Daniel Drimmer.

Drimmer, 42, would become the largest investor in the merged company, to be named Northview Apartment Real Estate Investment. He would have a 14.5 per cent interest in Northview and have the right to name two members of its board.

Northview is expected to be listed on the Toronto Stock Exchange, where Northern Property and True North units are traded.

In total, the Northview would have suites in more than 60 markets in every province but Prince Edward Island and Manitoba, as well as about 800 employees. The largest number of suites is 8,235 in Ontario.

Its head office would be in Calgary, where Northern Property has its base.

Under the proposed deal, True North shareholders would receive 0.3908 of a share of Northern Property for each share. Based on Friday’s closing price, the offer was worth $9 per share when the deal was announced, which was 16 per cent above True North’s closing price of $7.73 per share.

Drimmer and some of his associates, who collectively have 41.9 per cent of True North’s outstanding voting units, have agreed to vote in favour of the transaction.

In addition, Northern Property would pay $535 million — including $316 million cash, $49 million of assumed debt and equity issued by the trust — to acquire a portfolio of apartment suites from a joint venture between Starlight and Public Sector Pension Investment Board, which manages retirement funds for the RCMP, Canadian Forces and the reserve forces.

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