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$4.8-billion deal sends Northview Apartment REIT stock up 12.5%

Published 2020-02-20, 02:22 p/m
© Reuters.

Brenda O’Farrell

Investing.com – News of a $4.8-billion purchase offer has sent shares of Northview Apartment REIT (TSX:NVU_u) to soar more than 12.5% on Thursday, to lead the S&P/TSX Composite.

The deal, announced in a statement issued early Thursday, would see two private Canadian companies – Starlight Investments and KingSett Capital – acquire the real-estate firm in an all-cash deal whereby shareholders would receive $36.25 per share, which represents a 11.54% premium on the REIT’s closing price on Wednesday. Shares of Northview Apartment REIT closed Wednesday at $32.50.

The deal also offers investors the opportunity to buy into new publicly traded fund that will control more than 10,900 of Northview’s multi-residential suites, more than 340 executive suites and more than 1 million square feet of Northview’s commercial space. This new REIT will be a launched when the Northview deal closes.

The deal requires two-thirds support of all Northview unitholders to be approved. Northview’s board of directors has recommended the deal be approved.

"This transaction provides Northview unitholders with a premium above Northview's all-time high Unit closing price, with the option of continuing to invest alongside Starlight and KingSett in what we believe will be an attractive, publicly-listed, newly formed, high yield, multi-residential fund,” said Daniel Drimmer, president and CEO of Stralight. “We look forward to building on Northview's tenant focus by maintaining high-quality, well-operated and sustainable buildings. Starlight, which will operate the Northview properties, has high regard for Northview's management and intends to retain substantially all of Northview's site level employees and operational staff, as well as its offices in Calgary and Toronto."

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Starlight Investments is a Toronto-based real estate investment and management company that manages $14 billion in real estate securities, while KingSett Capital has completed $40 billion in investment transactions since 2002, and its various funds have ownership interests in a $15-billion portfolio across Canada.

Shares of Northview Apartment REIT have gained 19.79% in the last year.

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