Canadian Pension Plan Bids for Oxford Properties

August 22, 2001 ( - In the latest in a series of takeovers of property firms by retirement plans, one of Canada's largest pension plans has placed a $1 billion offer for Oxford Properties Group Inc on the table.

In a bid to cash in on the steady yields afforded by the property sector, the C$35 billion Ontario Municipal Employees Retirement System (OMERS), which already controls 20% of Oxford, announced that it will offer C$23.75 in cash for each Oxford share.

The deal, which gives OMERS a stable yield and a low-risk investment to fund future liabilities, is supported by Oxford’s board as well as key shareholders including chief executive Jon Love, who together hold 21% of the company and have signed a lock-up agreement to tender to the offer.

The bid will be made in September, and is expected to close in late October. It is conditional on 66.6% acceptance and Oxford has agreed to pay a break-up fee of C$35 million should the deal not be completed as planned.

Other real estate companies to be bought up by pension funds include Cambridge Shopping Centres Ltd by Ivanhoe, and Cadillac Fairview Corporation by the Ontario Teachers Pension Plan.

For MORE on the growing interest of pension plans in real estate, check out  A Second Look at Real Estate from the August Issue of PLAN SPONSOR magazine.