Del Cano Properties Trust, a Vancouver-based real estate investment trust, has successfully defended multiple unsolicited takeover bids from Everest Investors 15, LLC, Everest Investors 16, LP and their related entities. Del Cano, was organized as a Maryland real estate investment trust.
The first formal offer from Everest was made on October 9, 2001 for Del Cano priority preferred shares at US$4,500 per share and was amended on November 9, 2001 to increase the offer price to US$5,100 per share. This offer remained open until November 29, 2001. Upon expiry of the first Everest bid, approximately 8 per cent of the outstanding Del Cano shares were taken up under the Everest bid.
On February 21, 2002, Everest made an offer for one thousand Del Cano priority preferred shares at US$7,300 per share. The offer remained open until April 5, 2002. Upon expiry of this partial bid from Everest, none of the outstanding Del Cano shares were taken up under the bid.
In response to the Everest bids, Del Cano entered into a value maximization process that culminated on April 30, 2002, in a sale of Del Cano’s real estate portfolio to Aspen Square Management Inc. for US$107.55 million. Cash proceeds from the sale, which are expected to amount to approximately US$7,202 per share, are to be distributed to Del Cano’s shareholders after closing.
In its defence of the Everest bids and the subsequent sale of Del Cano’s real estate portfolio, Del Cano relied on its special committee, comprised of James Clark and Raymond Stone.
Del Cano was represented by Lang Michener in Vancouver, with a team including Stephen Wortley (securities, mergers and acquisitions), G. Barry Finlayson and Gwun Yee (securities), Tony Knight (real estate) and Rick Bennett (tax); Jim Hanks, Jr., and Michael Schiffer (Maryland real estate investment trust law) of Ballard Spahr Andrews & Ingersoll, LLP in Baltimore; and Quarles & Brady Streich Lang LLP in Phoenix, with a team including Steven Emerick, Bruce May and John O’Neal (U.S. securities, real estate and litigation).
Del Cano’s special committee was represented by Borden Ladner Gervais LLP, with a team that includes Neil de Gelder, Q.C., Stephen Mulhall and Craig Chiasson (litigation), Frank Allen (mergers & acquisitions) and Robert Kopstein (tax). Colin Erb of Deloitte & Touche LLP provided U.S. tax advice to the special committee.
Aspen was represented by in-house counsel Deborah Gaffney, and by Dick Gaberman of Gaberman & Parish, PC in Springfield, Massachusetts.
CIBC World Markets Inc., in Toronto, Vancouver and New York, was financial advisor to Del Cano’s special committee, which included Scott Keyworth, David Scott and Nicole Caty. CIBC World Markets was represented by Osler, Hoskin & Harcourt LLP, with a team comprised of Dale Ponder and Emmanuel Pressman.