Primaris Retail REIT said Thursday it is in contact with potential buyers in Canada and elsewhere who may be interested in topping a $4.4-billion hostile takeover offer by a consortium led by KingSett Capital.
Chief executive John Morrison urged unitholders to reject what he called KingSett's "opportunistic" bid because it "undervalues" the shopping centre real estate trust.
Not only does KingSett's bid not take into account the strategic value of the assets, he said it doesn't reflect any upside from potential acquisitions and development growth.
Primaris (TSX:RMZ.UN) units have surged more than 16 per cent since the offer was announced Dec. 5, and trade for more than the $26 per unit offer.
The units gained nine cents to close at $26.79 in Thursday trading on the Toronto Stock Exchange.
Morrison said the price reflects the market's belief that the trust with a large portfolio of shopping centres from coast to coast in Canada is worth more.
While he wouldn't say how much higher an acceptable bid would be, Morrison believes it can attract a better price.
The board of the Toronto-based REIT has unanimously rejected the current offer, which the trust said is designed to take advantage of the holidays when other potential buyers could face challenges in organizing an alternative bid.
The KingSett offer expires Jan. 17, but Primaris expects the deadline will be extended because its unitholder rights plan prevents KingSett from purchasing any units under its offer until the independent committee has completed its talks with third parties and its canvass of possible alternatives.
The plan also gives Primaris 60 days to find an alternative bidder.