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Streetwise Slate Properties acquires Huntingdon Capital for $210-million

Toronto's cityscape is seen from the waterfront near Ontario Place Blvd on March 24 2014. Constructiion cranes dot the skyline as condominium developments proceed to change the waterfront.

Fred Lum/Fred Lum/The Globe and Mail

Slate Capital Corp. has entered an arrangement to purchase fellow commercial real estate investor Huntingdon Capital Corp., adding to Slate's fast-growing list of properties.

The proposed deal would pay shareholders $13.25 in cash per share, as well as a one-time $0.15 per share special dividend, valuing the company at approximately $210-million. The premium offers investors 13 per cent more than the pre-announcement closing price of $11.85, the company said in a release.

In 2009, Huntingdon REIT merged with IAT Air Cargo Facilities Income Fund, marrying its commercial holdings with IAT's portfolio of aviation-related properties in the Western provinces. The newly-formed company rode the strengthening REIT market and made headlines with a hostile bid for Key REIT in 2013 that ultimately failed. Its shares languished, and in February it announced a strategic review.

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Slate, meanwhile, has been busy. When GE Capital announced a deal to sell its Toronto properties for a total of more than $1-billion, Pure Industrial Real Estate Trust purchased GE Capital's factories for a reported $358.5-million, and Slate took the rest, acquiring GE Capital's Toronto commercial properties. Slate's funds invest in Canadian office and commercial properties, U.S. grocery store-anchored properties and an open-ended U.S. commercial property fund.

Huntingdon stated that it had also sold its portfolio of aviation assets in Vancouver to the Vancouver Airport Authority for gross proceeds of $39.5-million. The company lists other aviation-related properties in Saskatchewan, Manitoba and Alberta on its web site.

Trimaven Capital Advisors Inc. and Evercore Partners Canada Ltd. advised Huntingdon in its strategic review. BMO Capital Markets advised Slate. Borden Ladner Gervais LLP were legal counsel to Huntingdon, while McCarthy Tétrault LLP acted for Slate.

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