Cadbridge Investors, an investment vehicle established by Canadian pension Caisse de dépôt et placement du Québec and hotel REIT Westmont Hospitality Group, is working with the InnVest real estate investment trust to acquire lodging REIT Legacy Hotels in a deal valued at C$2.5 billion ($2.4 billion;€1.7 billion), including debt.
The investor group is acquiring shares of Legacy for C$12.60 each, which represents a 20 percent premium over the hospitality chain’s 30-day average trading price on the Toronto Stock Exchange on February 28, 2007, the day before the REIT announced it was exploring strategic alternatives.
Focused on the high-end hotel market, Legacy is the largest Canadian hotel REIT and has 25 properties in Canada and the US. These include the Fairmont Le Chateau Frontenac, the Fairmont Royal York and the Fairmont Empress in Canada, as well as the Fairmont Olympic Hotel in Seattle and the Fairmont in Washington, DC in the US.
Under the terms of the agreement, InnVest reportedly plans to buy 11 hotels, largely the properties under the Delta banner, for about C$652 million. The consortium led by Caisse will acquire most of the Fairmont-branded properties.
Cadbridge is a limited partnership vehicle created by North American hotel group Westmont and Cadim, part of the property investment division at Caisse, a private financial institution that manages public and private pensions in Quebec. At the end of last year, Caisse had C$143.5 billion of net assets.
Cadim invests in real estate in the US, Europe and Asia and, at the end of last year, had around $36 billion in assets under management.