Cagim Real Estate Corporation

Cagim Real Estate Corporation

March 26, 2010 20:00 ET

Cagim Announces C$1.05 Per Share Cash Offer by BTB Real Estate Investment Trust

QUEBEC CITY, QUEBEC--(Marketwire - March 26, 2010) - Cagim Real Estate Corporation (the "Corporation" or "Cagim")(TSX VENTURE:CIM), a real estate management and acquisition corporation, announces that it has entered into a agreement (the "Support Agreement") with BTB Real Estate Investment Trust ("BTB") pursuant to which BTB has agreed, subject to the terms and conditions of the Support Agreement, to make an offer to acquire all of the issued and outstanding Class "A" common shares of Cagim ("Common Shares") by way of a negotiated take-over bid for C$1.05 per Common Share, payable cash, including Common Shares currently issued prior the expiry time of the Offer upon exercise or conversion of the currently outstanding Cagim debentures and stock options (the "Offer"). The Offer, entirely in cash, represents a premium of about 43% on the weighted average cost in relation to the volume of Common Shares of Cagim listed on the TSX Venture Exchange («TSXV») during a 20 consecutive day period ending March 26, 2010 and a premium of about 40% on the closing price today. BTB is a real estate investment trust listed on the TSX.

The Support Agreement namely provides for customary provisions relating to the support of Cagim's Board of Directors, non-solicitation and right to match covenants in favour of BTB, and the payment to BTB of a break-up fee equivalent to less than 3.5% of the equity value of this transaction, which means C$750,000, if Cagim enters into a binding written agreement with respect to a superior proposal made by a third party. The obligation of BTB to take up and pay for Cagim's shares pursuant to the Offer is also subject to the approvals of applicable regulatory authorities. BTB declares having the required financing to make full payment for the securities that he offers to acquire. Mr. Guy Boutin highlights the proposed transaction as follows: "long time investors and shareholders of Cagim who have held on patiently to their securities since the corporation's listing on the stock exchange, will be able to realize a substantial gain, thanks to the dedicated work of our team."

In connection with the Offer, Guy Boutin, Director, Chief Executive Officer and Leasing and Development Officer of Cagim, Fonds FBL Inc., of which Mr. Boutin is the principal shareholder, Stéphane Beshro, Director and President of Cagim and Gestion Best Inc., of which Mr. Beshro is the principal shareholder, have each entered into lock-up agreements with BTB pursuant to which they have agreed to, among other things, tender their Common Shares to the Offer. Other shareholders have also entered into lock-up agreements. The total lock-up agreements represent nearly 40% of the issued and outstanding Common Shares (calculated on a fully-diluted basis).

Cagim's Board of directors, pursuant to the favourable recommendation of a special committee formed of independent directors of Cagim mandated to examine the terms of the Offer (the "Special Committee"), after consulting with its financial and legal advisors, have unanimously determined that the Offer is fair to the holders of Common Shares and is in the best interests of Cagim and has recommended acceptance of the Offer by holders of Common Shares. Samson Bélair/Deloitte & Touche s.e.n.c.r.l., the financial advisor to Cagim's Special Committee, has provided an opinion that the consideration to be received by the holders of Common Shares under the Offer is fair, from a financial point of view, to such holders.

Commenting, on the offer,, Stéphane Beshro, mentioned: "as President, I am proud to see demonstrated to the shareholders the fair value of the business and the fact that the initiator of the present offer, BTB, is a Quebec business."

Formal documentation relating to the take-over bid is expected to be mailed by BTB in early April 2010. The Offer will be open for acceptance for a period of not less than 35 days and will be subject to conditions including, among other things, there being validly deposited and not withdrawn a number of Common Shares that represents 66 2/3% of the issued and outstanding Common Shares (calculated on a fully-diluted basis). In addition, the Offer will be subject to certain customary conditions, relevant regulatory approvals and the absence of any material adverse change with respect to Cagim. BTB may waive certain conditions of the Offer in certain circumstances. If the Offer is successful, BTB has agreed to take all steps available to it under relevant securities laws to acquire any remaining issued and outstanding Common Shares not deposited in the scope of the Offer.

Samson Bélair/Deloitte & Touche s.e.n.c.r.l. and Ogilvy Renauld LLP are acting as financial advisor and legal counsel to the Special Committee respectively and Séguin Racine, Attorneys is acting as legal counsel to the Board of Directors of Cagim.

About Cagim Real Estate Corporation

The Corporation is listed on the TSX Venture Exchange and operates property management and acquisition activities. The Corporation operates its activities through its subsidiaries ADG Immobilier Inc. and Complexe Lebourgneuf Inc.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Cagim Real Estate Corporation
    Mr. Denis Lepine
    Chief Financial Officer
    Cagim Real Estate Corporation
    Mr. Guy Boutin
    Leasing, Acquisitions and Development Director