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Key REIT’s tenants include KFC, Taco Bell, Tim Hortons Inc. and Shoppers Drug Mart Corp.Chris Bolin/The Globe and Mail

Key REIT says Plazacorp Retail Properties Ltd. has raised its friendly takeover offer for the real estate trust to top a rival bid from Huntingdon Capital Corp.

Plazacorp has offered $8.35 per unit in stock and cash for Key REIT, up from an earlier proposal of $8 per unit.

Like Plazacorp's earlier proposal, the amount of cash is limited to about half the $124-million offer for the Key REIT units, while the remainder would be paid in shares of the Fredericton-headquartered property company.

Including Key REIT debt to be assumed under the deal, Plazacorp's offer is worth $325 million.

Huntingdon raised its offer for Key REIT to $8 per unit in cash and stock; however, its offer did not put a limit on the amount of cash available. Huntingdon already owns 5.5 per cent of Key REIT's outstanding units.

Key REIT units sold for $8.06 before trading was halted on the Toronto Stock Exchange pending the announcement.