HR’s US$4.8 billion deal sparks revolt over CEO family’s share

Skip to Content News Archives Economy Defence Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Defence Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Defence Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomeReal EstateCommercial Real EstateHR’s US$4.8 billion deal sparks revolt over CEO family’s shareA company controlled by the family of Tom Hofstedter would buy assets worth about $2 billion — and it’s paying far less than that for themAuthor of the article:Paula Sambo and Derek DecloetA view of downtown Toronto courtesy of Scott McMaster, a pilot with the Canadian Harvard Aircraft Association (CHAA) flying the North American Harvard MK II airplane during a media preview for the 77th Canadian International Air Show on at Billy Bishop Toronto City Airport on September 3, 2026. Canada’s H&R Real Estate Investment Trust is facing growing opposition to its plan for a breakup and sale, with some investors arguing the deal gives too much value to the family of the chief executive.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountSandpiper Group, which holds one per cent of the property company’s shares, said Friday it will vote against the complex transaction that would see H&R split up into parts.This advertisement has not loaded yet, but your article continues below.It was followed Monday by another Canadian investment manager, Scheer, Rowlett & Associates Investment Management Ltd. The firm, “representing clients that own approximately 4.6 million H&R REIT units, intends to vote against the proposed transaction,” Brenna Phelan, a Toronto-based portfolio manager at the firm, said in a statement to Bloomberg.SUBSCRIBER EXCLUSIVE: FP West: Energy Insider brings you behind the oilpatch’s closed doors with exclusive insights from insiders every Wednesday morning.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of FP West: Energy Insider will soon be in your inbox.We encountered an issue signing you up. Please try againShe didn’t elaborate on the reasons. Scheer Rowlett’s stake represents more than 1.5 per cent of H&R’s shares. The investment firm is part of Connor Clark & Lunn Financial Group.The deal would see Blackstone Inc. and other investors get H&R’s industrial assets, while New York-based GO Residential Real Estate Investment Trust would acquire residential properties, mostly in the U.S. sunbelt. H&R shareholders would get a mix of cash and GO shares.A company known as CRAL that’s controlled by the family of Tom Hofstedter, H&R’s chief executive, would buy a collection of assets from H&R worth about $2 billion — and it’s paying far less than that for them, according to Sandpiper and others.Sandpiper has hired Norton Rose Fulbright Canada LLP as legal counsel and Kingsdale Advisors as a strategic adviser.This advertisement has not loaded yet, but your article continues below.The opposition has intensified since H&R disclosed details of a nearly two-year sale process, including earlier cash offers that ultimately fell apart.Analysts at RBC Capital Markets led by Jimmy Shan estimated that Hofstedter’s CRAL is paying about $500 million less than the properties it’s receiving are worth. The analysts cautioned that many of the properties are difficult to sell and carry substantial potential liabilities.RBC also questioned whether H&R’s insistence on selling the entire company in one transaction cost shareholders a better deal. “We struggle to see how HR unitholders will approve the deal,” Shan wrote in a note last week.When the deal was announced in August, the offer was worth $12.01 per H&R share and a total enterprise value of $6.7 billion.But GO REIT’s unit price has tumbled since then, reducing the deal value to around $10.50 a share, based on the price of GO early Monday afternoon in Toronto. H&R was trading at $9.81 as of 1:10 p.m.A spokesperson for H&R didn’t offer comment.H&R’s independent trustees unanimously recommended the deal, saying it represents the best option available after an extensive review failed to produce another viable offer for the entire company.RBC Global Asset Management, which owns 9.3 million shares, and Mill Pond Capital have also said they’ll vote against it.Shareholders are scheduled to vote on Nov. 13. The transaction requires approval from two-thirds of all votes cast and a majority of those cast by minority investors.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.