The group thatowns Toronto's Royal York Hotel and other greatnames in Canadian lodging has agreed to be sold to Quebec'sbig public fund manager, the Caisse de dépôt et placement, and hotel interestsfrom Mississauga, Ont.
At $12.60 a unit,the sale may notpop champagne corks among people who invested in Legacy Hotels Real Estate Investment Trust, especially if they stuck with itthrough the SARS panic of 2003 thatfrightened travellers, hammered the unit price andledLegacy to halt cash distributions for a year.
The units,listed on the Toronto to Stock Exchange,were worthless than $9 a year ago, butclimbed as high as $15 in June as Toronto-based Legacy sought a buyer.
In announcing the deal late Thursday, Legacy said the price is 20 per cent above the 30-day average before it put itself up for sale in March.
The units finished at $12.45 on Friday, up 45 cents on the TSX.
As well as less famous properties, Legacy'shotels include:
- Château Laurier in Ottawa.
- Château Frontenac in Quebec City.
- Queen Elizabeth in Montreal.
- The Palliser in Calgary.
- The Macdonald in Edmonton.
- The Empress in Victoria.
- The Hotel Vancouver.
Most areoperated under the Fairmontor Delta banner.
The buyers are the Caisse de dépôt and two outfits that share office space in Mississauga: Westmount Hospitality Group and InnVest Real Estate Investment Trust.
They also share Kenneth Gibson. He is president of TSX-listed InnVest and Canadianhead of Westmount, a privatehotel group with offices in Mississauga and Houston.
"Legacy’s portfolio consists of a diversified collection of well-branded hotel assets," Gibson said in a statement.
"We are thrilled to have the opportunity to purchase these quality assets… establishing InnVest as the largest hotel REIT in Canada."
Plan to split hotels between partnership
Legacy president Neil Labatte said the deal "reflects our commitment to deliver value to our unitholders.
"Over the10 years since our formation, we have assembled an unmatched portfolio of luxury and first-class hotels. We believe the price …fairly reflects the underlying value of these assets."
The plan is to split Legacy's hotels between InnVest and a Caisse-Westmount partnership called Cadbridge Investors, the announcement said.
Cadbridge would getLegacy's big-name hotels, which are managed by Fairmont Hotels &Resorts. InnVest would mostly get hotels operated under the Delta name.
Fairmont is also Legacy's biggest unitholder, with a 20.4 per cent stake. It has signed a lockup agreement promising to tender all its units under the offer, the announcement said.