Proxy advisory firms Institutional Shareholder Services Inc. and Glass Lewis & Co. LLC are recommending unit holders of Canadian Real Estate Investment Trust approve the planned merger with Choice Properties Real Estate Investment Trust at the upcoming special meeting April 11.
Retail-focused REIT Choice Properties is proposing to acquire the diversified REIT's assets and liabilities to create Canada's largest REIT, with an expected value of roughly C$16 billion. Under the deal, Canadian REIT will also redeem all its outstanding units for C$22.50 in cash and 2.4904 Choice Properties units per Canadian REIT unit.
ISS in its report said the combination "makes strategic sense" for reasons that include, among other things, the new entity's access to larger-scale development opportunities and increased cash flow from investment-grade tenants.
Glass Lewis said the deal reflects a "fair and acceptable" valuation for unit holders of Canadian REIT.
The boards of both REITs have deemed the deal to be in the best interest of their respective unit holders.