Canadian real estate investment firm Brookfield Property Partners LP this week made an unsolicited bid to buy the 66 percent stake in Chicago-based mall owner GGP Inc it does not own for US$14.8 billion in cash and stock, Reuters reported. With about 127 properties, mostly in the United States, GGP’s tenants include carmaker Tesla, jeweler Tiffany & Co and retailer Macy’s Inc. The deal is expected to create a company with an ownership interest in almost US$100 billion real estate assets globally and annual net operating income of about US$5 billion, Brookfield said. GGP shareholders will own about 30 percent of the combined company.
Neo Performance Materials, an advanced-materials supplier that emerged from bankruptcy in 2016, priced its recently filed initial public offering in Canada. The Toronto company is looking to raise $345 million by selling common shares at $19 to $22 per unit, the updated prospectus shows. The issue’s greenshoe option, if fully exercised, would bring the total raised to $345 million. All proceeds from the IPO will go to Neo Performance’s majority owner, Los Angeles distressed investor Oaktree Capital Management. This suggests Oaktree will likely reclaim a sizeable portion of the investment it made when it took control of the company a little over a year ago.
Resurrected Canadian steelmaker Stelco Holdings Inc is banking on growth from ramped-up production and acquisitions, Chief Executive Alan Kestenbaum told Reuters, as the 107-year-old company completed its initial public offering. Hamilton, Ontario-based Stelco, owned by U.S. private equity group Bedrock Industries, will use part of its $230 million IPO proceeds on projects that boost capacity at its two steel-processing facilities in southern Ontario. The listing also allows quick access to capital markets if a suitable M&A deal emerges among “numerous” potential targets, Kestenbaum said.
Canadian fertilizer producer and farm supplier Agrium Inc said this week it will sell its Idaho phosphate production facility for US$100 million to fertilizer company Itafos, to address concerns of U.S. regulators about its merger with Potash Corp of Saskatchewan, Reuters reported. Under the deal, Itafos gets Agrium’s Conda, Idaho plant and adjacent mineral rights. Separately, Agrium will sell its North Bend, Ohio, nitric acid plant to a subsidiary of Trammo Inc for an undisclosed price. In June, Itafos closed a US$34.05 million funding deal with Zaff, Pala Investments and J.P. Morgan Asset Management. Itafos recently redomiciled from Canada to the Cayman Islands.
Signa Holding GmbH, the Austrian property and retail group that owns German department store operator Karstadt, sent Hudson’s Bay Co this week details of the financing it has put together for its 3 billion euro bid (US$3.5 billion) for Kaufhof, a German retail chain owned by Hudson’s Bay, Reuters reported. Hudson’s Bay had said last week it would review Signa’s offer for Kaufhof, but also called it incomplete, non-binding and unsolicited, with no evidence of financing. U.S. activist hedge fund Land & Buildings Investment Management LLC, which has been pressuring Hudson’s Bay to consider asset sales, said last week it was unclear what additional evidence Hudson’s Bay would expect at this stage regarding Signa’s ability to finance the Kaufhof transaction.
A unit of Canada’s Brookfield Asset Management said it is evaluating a number of telecom tower portfolios in India to scale its presence after talks to acquire over 40,000 towers from debt-laden Reliance Communications hit a snag, Reuters reported. The deal with Brookfield hinged on Reliance Communications, or RCom, merging its mobile operations with rival Aircel but the merger was called off last month due to regulatory delays and legal uncertainties. "The merger will not proceed and therefore our transaction as previously announced will not proceed either. However, we continue to monitor the evolving situation to determine if revised terms can be agreed upon," Brookfield Infrastructure Partners said in an SEC filing on November 3. Brookfield said it is still pursuing RCom and other opportunities in this sector to scale its presence in India.
A recent edition of the Globe & Mail featured the following eye catcher: “Canadian M&A Craters in the Third Quarter”. While it’s true that mega-deals cratered in the third quarter, mid-market activity, the bread and butter of Canadian mergers and acquisitions, remained strong, writes Karen Fisman of Toronto boutique M&A advisory firm Valitas Capital Partners. In an exclusive feature article for PE Hub Canada, Fisman says Valitas and other market sources believe 2017 is in fact shaping up quite well for Canada's mid-market, with the fourth quarter already off to a strong start.
Bombardier Inc should look at all options for its transportation business including partnering with China’s state-owned CRRC Corp, Reuters reported, quoting one of Bombardier’s biggest shareholders. “I think we have to look at everything. Every opportunity that comes up ought to be looked at,” Caisse de dépôt et placement du Québec Chief Executive Michael Sabia told reporters when asked about a deal with CRRC. Germany’s Siemens and France’s Alstom said they are merging their train manufacturing operations in September, leaving Bombardier competing in a market dominated by CRRC, the world’s largest train maker. The Caisse announced a $2.1 billion (US$1.5 billion) convertible share investment in Bombardier’s rail arm in 2015 and closed the deal the following year.
Signa Holding, the Austrian property and retail group that owns German department store chain Karstadt, has made a 3 billion euro (US$3.5 billion) offer to acquire Hudson’s Bay Co’s German peer Kaufhof, sources told Reuters. Signa submitted the fully financed bid this week, the sources said. They added that Signa expects Hudson’s Bay, which has been reluctant so far to engage in negotiations to sell Kaufhof, to respond by mid-November.The bid comes one week after Hudson’s Bay agreed to sell its flagship Lord & Taylor building in New York for US$850 million to WeWork Cos and raise an investment from U.S. private equity firm Rhône Capital.
French energy company Engie SA and Brazilian investment firm Pátria Investimentos Ltda are among 20 groups interested in a controlling stake in a gas pipeline network owned by Petroleo Brasileiro SA, sources told Reuters. Petrobras, as Brazil’s state-controlled oil company is known, will receive a first round of non-binding proposals for a 90 percent stake in Transportadora Associada de Gás SA, known as TAG, by the end of November, the sources said. Other contenders for TAG, which owns 4,500 kilometres of natural gas pipelines in northeastern region of Brazil, include Abu Dhabi state-owned holding Mubadala Development Co, Canada Pension Plan Investment Board (CPPIB) and U.S. private equity group EIG Global Energy Partners. One of the sources said Petrobras aimed to fetch a price above the US$5.2 billion paid last year by a group led by Brookfield Asset Management for another gas pipeline company, Nova Transportadora do Sudeste SA.