KingSett Capital’s $4.4-billion bid for Primaris Retail REIT looks skimpy on some measures, but the buying group may not have much competition that forces the price higher.
KingSett’s hostile offer is $26 a share, which represents about a 13 per cent premium to Primaris’ trading price lately. That’s pretty slim relative to recent precedents. Looking at purchases in the real estate business in North America in the past three years, in deals worth more than $500-million, the average announced premium has been 19 per cent, according to data from Bloomberg. Another way of looking at it is that investors could hold Primaris for about 2 1/2 more years and collect the equivalent of that premium in distributions.