Winnipeg Free Press
Saturday November 13 2004
By Martin Cash
THE controlling shareholder of Consolidated Properties, owner of Portage Place, has announced its intention to purchase all outstanding shares and take the company private. Trading in Consolidated Properties was close to record volumes yesterday after Aspen Properties Ltd. announced it will offer $2.75 a share for the 49 per cent of Consolidated it does not currently own. The Aspen offer came just days before the deadline for Consolidated's board of directors to respond to a Sept. 17 takeover offer made by Geosam Acquisitions offering $2.50 a share. Geosam owns about 11 per cent of Consolidated and its offer was conditional on several matters, including that it was able to buy at least 40 per cent of the outstanding shares.
A joint press release from Halifax-based Geosam and Calgary-based Aspen said Geosam had withdrawn its offer and will be supportive of the Aspen bid.
A special committee of Consolidated's still has to evaluate Aspen's offer and issue a circular to shareholders detailing the deal, expected in will the next couple of weeks.
In an interview from his office in Toronto, George Armoyan, CEO of Geosam as well as the trucking firm Clarke Inc., said he will go along with the new offer.
"We probably will tender, barring anything else happening," he said, referring to the possibility of another, even better offer coming along. "We'll tender and move on to other things."
He and others in the industry were not particularly optimistic there would be another offer for Consolidated. Aggressive trading in the stock at a price near the offering price, led one industry observer to suggest it was an indication the offer is being taken seriously. More than 800,000 Consolidated shares, out of a total float of 10.5 million, were traded yesterday, closing at $2.71, up 20 cents.
Scott Hutcheson, president and CEO of both Consolidated and Aspen, said the special committee of Consolidated's board will have to analyse the offer, but the general sense is that it is likely to be successful.
Consolidated was started in Winnipeg during the early 1990s to serve as a vehicle to provide liquidity to investors who put money into a plethora of limited partnership real estate projects. Because of the various cycles in the real estate, interest rate and equity markets, Consolidated's shares have never caught investors' attentions. Four years ago, Aspen launched a hostile bid for the company and eventually ended up with just over 50 per cent.
Hutcheson said among other things, the structure of the company was no longer in vogue among investors in publicly traded real estate companies.
"There are hardly any non-REIT (real estate investment trusts) real estate companies that are publicly traded," said Hutcheson in a telephone interview from his office in Calgary. "Even the big ones like Oxford and Cadillac Fairview went private, and institutional investors have left the small cap market."
Consolidated's portfolio is now dominated by Calgary office buildings that are a little smaller and older to be considered class A space. Its last remaining Winnipeg property is Portage Place shopping centre, which has been on the sales block for months. Hutcheson would not comment on the likelihood of the downtown Winnipeg shopping centre being sold before the Aspen deal closes.
martin.cash@freepress.mb.ca