Shareholders of Dundee Realty Corp. yesterday endorsed plans to convert the real estate company into an income trust, adding yet another firm to the trust bandwagon.
Ned Goodman, chairman of Dundee Realty and chief executive officer of its major shareholder, Dundee Bancorp Inc., told the annual meeting the move will "unleash the imbedded value" of the Toronto firm.
The conversion to a real estate investment trust was supported by 84 per cent of minority shareholders and 94 per cent of total shareholders.
It still requires court approval to take affect.
Mr. Goodman devoted the bulk of his comments yesterday to the independent evaluation report conducted by RBC Dominion Securities Inc. as part of the deal, as well as press coverage of that report.
Under the conversion, Dundee will place its industrial and office properties into the REIT. Its other holdings will form a wholly owned subsidiary of Dundee Bancorp, and Dundee Realty investors will receive $3 a share for those assets. RBC called this deal "financially inadequate."
Mr. Goodman countered that assessment yesterday by recalling RBC's stock recommendations for Nortel Networks in 2000, before that company's earnings collapsed.
In response to newspaper coverage of the report and the $12-million in special cash payments to Dundee Realty directors and employees under the deal, Mr. Goodman told the tale of his Ukrainian grandfather who was shot defending his land in 1917. "In the Soviet Union, socialists shot landowners. Today, thankfully, I live in a country where they only work for the business newspapers."
Once the deal is finalized, Dundee will join the 20 existing REITs on the Toronto Stock Exchange.
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