NEW YORK (CNNMoney) — An investment group led by Canderel has bid $2.9 billion for Canadian real estate investment trust Cominar Real Estate Investment Trust.
Canderel and CPP Investment Board, a Canadian pension fund, plan to spend an additional $750 million buying Canadian mortgages from the trust.
Canderel is a maker of wood treatment and architectural materials that is based in Germany and Belgium, but it operates globally through its network of about 200 factories.
CPP Investment Board is Canada’s largest pension fund, and Canderel’s board has in recent years invested about $1 billion in a U.S. automotive manufacturing plant that Canderel is building in Detroit.
Canderel already has a controlling stake in the trust’s operating subsidiary, Cominar Office Properties. Cominar is one of Canada’s largest real estate companies and operates industrial and office properties in Canada and the United States.
CPP Investment Board said the proposal includes $850 million in cash and the purchase of another $250 million in Cominar stock.
CPP Investment Board also owns a stake in Canderel.
If the proposed deal gets finalized, Canderel would own about 40% of Cominar’s equity and Cominar’s largest shareholders, excluding CPP Investment Board, would own about 43%.
Canderel said last year that it planned to break itself into two companies and sell the two separate entities. Canderel owns Cominar’s vacation property operations and the German office property business.
Meanwhile, CPP Investment Board owns more than $13 billion in Canadian real estate assets. It invests in office, industrial and retail properties.
The trust’s shares, which have fluctuated in the mid-teens, were up 6.7% in Toronto early Thursday.