Northview REIT sold for $4.8B

Northview REIT to be acquired by Starlight, KingSett for $36.25 per unit

Northview Apartment Real Estate Investment Trust (NPRUF) announced that it has entered into an arrangement agreement with affiliates of Starlight Group Property Holdings pursuant to which the Purchasers will acquire Northview, and the holders of Northview’s outstanding trust units will receive $36.25 per Unit in cash in a transaction valued at $4.8 billion including net debt.

Northview REIT sold for $4.8B, Stockwinners

Under the Arrangement Agreement, the Purchasers will acquire Northview, and the holders of Northview’s outstanding Units will receive $36.25 per Unit.

The Offer Price represents a total equity value of approximately $2.5 billion on a fully diluted basis and a total transaction value of approximately $4.8 billion including the assumption of net debt. The Transaction is not subject to a financing condition.

Unitholders will be able to elect to receive 100% of the Offer Price in the form of cash.

Starlight buys Northview REIT, Stockwinners

Alternatively, unitholders may elect to receive all or a portion of the Offer Price in units of a new, multi-residential fund that would own a geographically diverse portfolio of Northview properties located in six Canadian provinces and two territories.

The High Yield Fund will apply to list its units on a Canadian securities exchange concurrently with the close of the Transaction. The listing will be subject to the High Yield Fund fulfilling all of the initial listing requirements and conditions of the Exchange.

Further details with respect to the High Yield Fund will be provided in the management information circular to be mailed to Northview Unitholders. Elections to receive High Yield Fund units will be subject to proration.

All-Cash Elections will not be subject to proration. Unitholders not specifying an election will be deemed to have elected to receive the All-Cash Consideration.

Pursuant to the Arrangement Agreement, Northview has an initial 30-day go-shop period, beginning on February 19, 2020 and ending on March 20, 2020, during which it is permitted to actively solicit, evaluate and enter into negotiations with third parties that express an interest in acquiring Northview. Northview has the option to extend the Go-Shop Period by up to 30 days, in certain circumstances.

Mr. Daniel Drimmer, Chief Executive Officer and President of Starlight, has committed to vote the Units he beneficially owns, controls or directs in favour of, or tender his Units into, any all-cash superior proposal received during the Go-Shop Period, subject to certain terms and conditions, pursuant to a voting and support agreement.

The Arrangement Agreement also provides a two-tier termination fee structure such that if Northview is successful in completing a transaction pursuant to a superior proposal received during the Go-Shop Period, there will be a termination fee payable to the Purchasers of $37.7 million.

If a transaction is completed pursuant to a superior proposal received following the expiry of the Go-Shop Period, the Purchasers will be entitled to a termination fee of $88.0 million.

The Purchasers will have the right to match any superior proposals received either during or after the Go-Shop Period. The Transaction is structured as a statutory plan of arrangement under the Alberta Business Corporations Act.

Completion of the Transaction requires approval of at least 66 2/3% of the votes cast by unitholders and holders of special voting units, as well as the approval by a simple majority of votes cast by disinterested unitholders and holders of special voting units, excluding Starlight, its affiliates and any other unitholders required to be excluded under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions.

The Transaction is also subject to approval of the Alberta Court of Queen’s Bench, regulatory approvals, consents and approvals from Canada Mortgage and Housing Corporation and certain of Northview’s lenders and the satisfaction of other customary closing conditions.

Northview expects to continue to pay a monthly distribution of $0.1358 per trust unit through closing of the Transaction. The Transaction is expected to close by Q3 of 2020.

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Liberty Property Trust sold for about $61 per share

Prologis to acquire Liberty Property for $12.6B

Prologis (PLD) and Liberty Property Trust (LPT) announced that the two companies have entered into a definitive merger agreement by which Prologis will acquire Liberty in an all-stock transaction, valued at approximately $12.6B, including the assumption of debt.

Prologis buys Liberty Property Trust, Stockwinners

The board of Prologis and the board of trustees of Liberty have each unanimously approved the transaction.

Warehouses and logistics facilities — Liberty’s specialty — have become a hot part of the real estate market as more shopping moves online and demand for the space increases. 

The acquisition gives Prologis a portfolio of 107 million square feet of logistics properties that’s owned or managed, as well as buildings under construction and land for future development. It also includes 4.9 million square feet of office space.

Prologis plans to dispose of approximately $3.5B of assets on a pro rata share basis. This includes $2.8B of non-strategic logistics properties and $700M of office properties.

This transaction is anticipated to create immediate cost synergies of approximately $120M from corporate general and administrative cost savings, operating leverage, lower interest expense and lease adjustments.

Initially, this transaction is expected to increase annual core funds from operations per share by 10c-12c. Upon stabilization of the acquired development assets, completion of the planned non-strategic asset sales and redeployment of the related proceeds, annual stabilized core FFO per share is forecasted to increase by an additional 4c per share for a total of 14c-16c.

Liberty holds mostly class A properties, Stockwinners

Further, there are future synergies with the potential to generate approximately $60M in annual savings, including $10M from revenue synergies and $50M from incremental development value creation.

“Liberty’s logistics assets are highly complementary to our U.S. portfolio, and this acquisition increases our holdings and growth potential in several key markets,” Prologis Chairman and Chief Executive Hamid R. Moghadam said in the statement.

Under the terms of the agreement, Liberty shareholders will receive 0.675x of a Prologis share for each Liberty share they own.

The transaction, which is currently expected to close in Q1 of 2020, is subject to the approval of Liberty shareholders and other customary closing conditions.

Liberty shares have risen 21% this year, compared with the 55% jump in Prologis shares. 

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Vail Resorts buys Peak Resorts for $11.00 per share

The deal is valued about $170 million

Peak Resorts (SKIS) announced that it has entered into a definitive merger agreement with Vail Resorts, Inc. (MTN) pursuant to which Vail Resorts will acquire all outstanding shares of common stock of Peak Resorts for $11.00 per share in cash.

Vail Resorts to buy Peak Resorts, Stockwinners

The transaction represents a 116% premium to Peak Resorts’ closing stock price on July 19, 2019.

The transaction is expected to close in fall 2019 and is subject to certain conditions, including a vote of Peak Resorts shareholders and antitrust clearance.

Vail Resorts buys Peak Resorts, shares jump. Stockwinners

The transaction was approved by the Boards of Directors of both companies. Peak Resorts’ Board of Directors also recommends that the Company’s shareholders approve the transaction.

Moelis & Company LLC is serving as financial advisor to Peak Resorts. Perkins Coie LLP, Sandberg Phoenix & von Gontard P.C. and Armstrong Teasdale LLP are serving as legal counsel to Peak Resorts.

About the Companies

Peak Resorts, Inc. owns, operates, and leases day and overnight drive ski resorts in the United States. Its resorts activities and amenities include skiing, snowboarding, terrain parks, tubing, dining, lodging, equipment rentals and sales, ski and snowboard instruction, golf, zip lines, mountain coasters, mountain biking, hiking, paint ball, and other summer activities. It operates 17 ski resorts primarily located in the Northeast, Mid-Atlantic, and Midwest.

Vail Resorts has been on a shopping spree, Stockwinners

Vail Resorts, Inc. operates mountain resorts and urban ski areas in the United States. The company operates through three segments: Mountain, Lodging, and Real Estate. The Mountain segment operates 11 mountain resorts, including Vail Mountain, Breckenridge Ski, Keystone, and Beaver Creek resorts in Colorado; Park City resort in Utah; Heavenly Mountain, Northstar, and Kirkwood Mountain resorts in the Lake Tahoe area of California and Nevada; Whistler Blackcomb in Canada; Stowe Mountain resort in Vermont; and Perisher in Australia, as well as 3 urban ski areas, such as Wilmot Mountain in Wisconsin, Afton Alps in Minnesota, and Mount Brighton in Michigan.

Vail Resorts expands its footprint by purchasing Peak Resorts, Stockwinners

Its resorts offer various winter and summer recreational activities. The Lodging segment owns and/or manages various luxury hotels and condominiums under the RockResorts brand, and other lodging properties; various condominiums located in proximity to the company’s mountain resorts; destination resorts; and golf courses, as well as offers resort ground transportation services. This segment operates approximately 5,400 owned and managed hotel and condominium units.

The Real Estate segment owns, develops, and sells real estate properties in and around the company’s resort communities. 

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Fiat Chrysler to invest $4.5B in Michigan

Fiat Chrysler to invest $4.5B in five existing Michigan plants

FCA (FCAU) would invest $1.6 billion to convert the two plants that comprise the Mack Avenue Engine Complex into the future assembly site for the next-generation Jeep Grand Cherokee, as well as an all-new three-row full-size Jeep SUV and plug-in hybrid (PHEV) models, adding 3,850 new jobs to support production.

The Company intends to start construction of the new Detroit facility by the end of Q2 2019 with the first three-row vehicles expected to roll off the line by the end of 2020, followed by the all-new Grand Cherokee in the first half of 2021.

Also as part of this announcement, the Jefferson North Assembly Plant would receive an investment of $900 million to retool and modernize the facility to build the Dodge Durango and next-generation Jeep Grand Cherokee.

FCA expects to create 1,100 new jobs at Jefferson North. The reborn Mack facility would be the first new assembly plant to be built in the city of Detroit in nearly three decades.

In 1991, Jefferson North was the last new assembly plant built in the city.

When complete, Mack would join Jefferson North as the only automotive assembly plants to be located completely within the city limits of Detroit. The Pentastar engines – the 3.6-, 3.2- and 3.0-liter – currently built at Mack would be relocated to the Dundee Engine Plant as part of a $119 million investment. Pentastar production at Mack I would end by Q3 2019.

Mack II has been idle since it ceased production of the 3.7-liter V-6 in September 2012.FCA also confirms the investment at Warren Truck to retool for production of the all-new Jeep Wagoneer and Grand Wagoneer, announced in 2017, along with their electrified counterparts, would increase to $1.5 billion.

The Pentastar Engines currently built at Mack would be relocated to the Dundee Engine Plant, Stockwinners

Production is expected to launch in early 2021. In addition to the new Jeep models, the plant would continue building the Ram 1500 Classic, which is being extended to meet market demand. It is expected that 1,400 new jobs would be added.

As a result of this investment announcement, production of the all-new Ram Heavy Duty will continue at its current location in Saltillo, Mexico.

To support the additional production, the Company’s Warren Stamping (Warren, Michigan) and Sterling Stamping (Sterling Heights, Michigan) plants would receive investments of $245 million and $160 million, respectively, with Sterling Stamping expected to add more than 80 new jobs.


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Starwood Property Trust goes shopping

Starwood Property to acquire GE Capital Project Finance Debt Business for $2.56B

Starwood Property goes shopping, Stockwinners
Starwood Property goes shopping, Stockwinners

Starwood Property Trust (STWD) announced that the company has entered into a definitive agreement to acquire GE Capital’s (GE) Energy Financial Services’ Project Finance Debt Business and loan portfolio for $2.56B, including $400M of unfunded loan commitments.

The acquired business will leverage the extensive experience of the company’s affiliate, Starwood Energy Group, which specializes in comparable energy infrastructure equity investments and has executed transactions with approximately $7B in asset value since its inception in 2005.

GE’s Energy Project Finance Debt Business includes a vertically integrated platform with a seasoned leadership team and 21 full-time employees across loan origination, underwriting, capital markets and asset management.

The Loan Portfolio consists of 51 senior loans secured by energy infrastructure real assets.

The company anticipates the transaction will be accretive to core earnings.

The company expects to finance the transaction with a new secured term loan facility from MUFG with an initial advance of approximately $1.7B and committed capacity for future funding obligations in the Loan Portfolio.

The company has ample available liquidity in addition to a $600M committed acquisition facility from Credit Suisse and Citigroup Global Markets Inc. to fund the balance of the purchase price.

The completion of the acquisition is subject to the satisfaction of a number of customary conditions and is expected to close in the third quarter of 2018.

STWD closed at $22.45. GE closed at $13.16.


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Gramercy Property Trust sold for $7.6 billion

Gramercy Property Trust to be acquired by Blackstone for $27.50 per share 

Gramercy Property Trust sold for $7.6 billion. Stockwinners
Gramercy Property Trust sold for $7.6 billion.

Gramercy Property Trust (GPT) announced that it has entered into a definitive agreement with affiliates of Blackstone Real Estate Partners VIII, under which Blackstone (BX) will acquire all outstanding common shares of Gramercy for $27.50 per share in an all-cash transaction valued at $7.6B.

The transaction has been unanimously approved by Gramercy’s Board of Trustees and represents a premium of 23% over the 30-day volume-weighted average share price ending May 4, 2018 and a premium of 15% over the closing stock price on May 4, 2018.

Completion of the transaction, which is currently expected to occur in the second half of 2018, is contingent upon customary closing conditions, including the approval of Gramercy’s shareholders, who will vote on the transaction at a special meeting on a date to be announced.

The transaction is not contingent on receipt of financing by Blackstone.

Gramercy shareholders will be entitled to receive the previously announced second quarter dividend of $0.375 per share payable on July 16, 2018, and if the transaction is completed after October 15, 2018 Gramercy shareholders will receive a per diem amount of approximately $0.004 per share for each day from October 15, 2018 until the closing date.

Gramercy Property Trust is a leading global investor and asset manager of commercial real estate. The Company specializes in acquiring and managing high quality, income producing commercial real estate leased to high quality tenants in major markets in the United States and Europe.


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DCT Industrial Trust sold for $8.4B

Prologis to acquire DCT Industrial Trust for $8.4B

DCT Industrial Trust sold for $8.4B. Stockwinners
DCT Industrial Trust sold for $8.4B. 

Prologis (PLD) and DCT Industrial Trust (DCT) announced that the two companies have entered into a definitive merger agreement by which Prologis will acquire DCT for $8.4B in a stock-for-stock transaction, including the assumption of debt.

The boards of directors of both companies have unanimously approved the transaction.

The transaction is anticipated to create substantial synergies, including near-term synergies of approximately $80M in corporate general and administrative cost savings, operating leverage, interest expense and lease adjustments, which are forecast to increase annual stabilized core funds from operations per share by 6c-8c.

A combination of revenue synergies and incremental development volume has the potential to generate $40M of additional annual revenue and development profit in the future.

Under the terms of the agreement, DCT shareholders will receive 1.02 Prologis shares for each DCT share they own. The transaction, which is currently expected to close in the third quarter of 2018, is subject to the approval of DCT stockholders and other customary closing conditions.

At closing, it is anticipated that Philip L. Hawkins will join the Prologis board of directors.

PLD closed at $66.58.  DCT closed at $58.75.


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GGP receives $23 per share offer

GGP confirms receipt of unsolicited proposal from Brookfield Property

general-growth-properties receives $23 a share offer. See Stockwinners.com for details

GGP Inc. (GGP) confirmed that on Saturday, November 11, 2017, the company’s Board of Directors received an unsolicited proposal from Brookfield Property Partners L.P. (BPY) for BPY to acquire all of the outstanding shares of common stock of GGP other than those shares currently held by BPY and its affiliates.

According to the Proposal, each GGP stockholder would be entitled to elect to receive consideration per GGP common share of either $23.00 in cash or 0.9656 of a limited partnership unit of BPY, subject in each case to pro-ration based on a maximum cash component of 50% of the aggregate offer and a maximum stock component of 50% of the aggregate offer.

General Growth Properties, Inc is an equity real estate investment trust. The firm invests in the real estate markets of the United States. It engages in owning, managing, leasing, and redeveloping high-quality regional malls.

The Board has formed a special committee of its non-executive, independent directors which, in consultation with its financial and legal advisors, will carefully review and consider the Proposal and pursue the course of action that it believes is in the best interests of the company’s stockholders.

The company’s stockholders do not need to take any action at this time.

Goldman Sachs & Co. LLC. is serving as financial advisor and Simpson Thacher & Bartlett LLP is serving as legal counsel to the Special Committee.

Citigroup Global Markets Inc. is serving as financial advisor and Sullivan & Cromwell LLP is serving as legal counsel to GGP.


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March to the End Continues

Sears announces plans to close another 28 Kmarts as SSS drop 11.5%

Sears jumps after announcing latest licensing deals for Kenmore, DieHard brands. See Stockwinners.com Market Radar for details

Shares of Sears Holdings (SHLD) gained in Thursday’s trading after the company’s results were better than analysts were expecting despite a decline in comparable store sales. Sears also announced plans to close an additional 28 Kmart stores.

EARNINGS

Before the market open, Sears reported an adjusted loss per share for the second quarter of ($1.16), which beat analysts’ ($2.48) consensus. Revenue for the quarter of $4.365B also beat estimates of $4.21B, but comparable store sales declined 11.5%.

Kmart comparable store sales decreased 9.4%, with a 6.8% decline excluding the impact of the consumer electronics and pharmacy categories, while Sears comparable store sales declined 13.2%, with a 12.1% decline excluding consumer electronics category, the company said.

Sears said in a statement that the retail environment “remained challenging” in the quarter, noting softness in store traffic and elevated price competition.

Chairman and CEO Edward Lampert said that the third quarter has historically been Sears’ most difficult quarter over the past few years, the company is “encouraged” that July was the best month of the quarter in terms of SSS performance.

COST-CUTTING  EFFORTS

#Lampert said the company is making “significant” progress in its restructuring program. Earlier this year, Sears said there was “substantial doubt” related to its ability to continue as a going concern. The company cited its cost cutting efforts, as well as debt financing actions in the filing.

In May, Sears reported a smaller than expected quarterly loss, saying that while Q1 was challenging, it was committed to returning to “solid financial footing.”

Sears has been trying to cut costs by closing stores, and said that so far this year, it has closed about 180 stores previously announced for closure and an additional 150 stores previously announced for closure are expected to be closed by the end of the third quarter.

Additionally, Sears announced plans today to close an additional 28 Kmart stores “later this year.” Sears said on its earnings call that it is “committed” to evaluating strategic options across its real estate portfolio to unlock value, including in-store partnerships and sub-division opportunities.

WHAT’S  NOTABLE

Earlier this week, Sears signed two licensing agreements intended to expand the reach of its Kenmore and DieHard brands internationally. The licensing deals followed Sears’ recent decision to launch a Kenmore dedicated brand presence on Amazon.com (AMZN).

The Kenmore appliance brand page went live on Amazon last week, marking Amazon’s first and only dedicated brand page for home appliances.

The company also announced the integration of the full line of Kenmore Smart appliances with Amazon Alexa.

RETAIL  ENVIRONMENT

Additionally, Sears and other mall-based retailers and department stores have been hurt by the increasing popularity of fast-fashion retailers like Zara, Forever 21 and H&M, as well as an increase in online shopping on sites such as Amazon.

Macy’s (M), Kohl’s (KSS) both recently reported declining quarterly comp sales, though Kohl’s EPS and revenue narrowly beat estimates.

J.C. Penney (JCP) reported a larger than expected loss for the latest quarter, with its comp sales dropping 1.3%.

Nordstrom (JWN) said in June that members of its founding family formed a group to explore the possibility of pursuing a “going private” transaction, but WWD recently said that the retailer is not in negotiations with “anybody” regarding a potential sale.

PRICE ACTION

Shares of Sears are up almost 6% to $9.05 in late morning trading. Following the merger of Kmart and Sears a few years ago, SHLD traded at $100+ per share. Since the merger, shares have drifted lower, toward zero, as Lampert is dismantling the company and selling it piece by piece. He started with selling the real estate assets and now DieHard and Kenmore are sold.


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