18th Sep 2019 17:06
(Alliance News) - Investor Middlefield Canadian Income PPC on Wednesday expressed its delight after a core investee received a takeover offer at a large premium.
Middlefield, which mainly focuses on Canadian and US equities, has a 2.5% stake in Dream Global REIT.
Dream Global on Monday announced it has agreed a CAD6.2 billion, or GBP3.74 billion, takeover deal by funds managed by Blackstone Group Inc. The CAD16.79 per share price is a 19% premium to Dream Global's closing price on Friday last week.
Dream Global has been in Middlefield's portfolio since June 2017, and since then its share price has risen 46% in sterling terms, giving Middlefield a total return of over 90%.
The Canadian real estate firm owns 215 industrial and office assets across Western Europe, worth around EUR4.0 billion.
Dean Orrico, president of Middlefield, said: "We are delighted by the news Dream Global has attracted a recommended cash bid from Blackstone at a price that more fully reflects the underlying value of the REIT's property portfolio. Real estate continues to be the fund's single largest sector weighting since we believe many Canadian REITs remain very well positioned as a result of the quality of their assets, the expectation interest rates will remain lower for longer and the significant demand for real assets from Blackstone and other private institutional investors.
"Dream Global represents the second portfolio acquisition by Blackstone in the past 18 months. In May 2018, Blackstone completed the acquisition of Pure Industrial REIT, a leading industrial real estate company in Canada and the US."
"The acquisition of Pure represented a 21% premium to their previous closing price and at the time represented a 3.0% portfolio weighting of Middlefield. We believe this demonstrates the enduring interest from major alternative asset managers in the value and investment attributes offered by Canadian REITs," Orrico added.
Middlefield shares closed 1.5% lower on Wednesday in London at 98.60 pence each.