CANADA - OMERS, the C$35.9bn (US$16bn) Ontario Municipal Employees Retirement System is set to purchase Oxford Properties Group in a C$1.5bn (US$968m) deal.
OMERS' all cash offer, which has been accepted by Oxford's management, is set at C$23.75 per share for all of the property groups stock. The pension fund currently has a 17% stake in the firm and expects to make the bid in September, with the deal closing in late October.
The acquisition, made through OMERS subsidiary BPC Properties, will increase the value of the pension fund’s real estate portfolio by C$3.8bn (US$2.45bn), bringing it up C$7.8bn (US$5bn). Under the terms of the deal, Oxford can not seek any competing proposals and would have to pay a termination fee of C$35m (US$22.6m) should the deal fail to be completed.
Dale Richmond, OMERS president and chief executive officer, said of the acquisition: We are pleased to acquire ownership of a well run company with which we have enjoyed a profitable and close relationship for over a decade. Real estate serves as a hedge against inflation and provides a solid revenue base.
*Oxford Properties Group manages and owns interests in prime office, industrial and retail premises in Canada’s major urban markets. The company owns about 24m square feet of a 43m square foot portfolio, and manages a total 60m square feet of rentable area. Oxford's core business is Class A downtown office complexes in Toronto, Calgary, Edmonton and Montreal.
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