Temple Hotels has a change of Control
Temple Hotels is a small reit that used to be bigger.It has a lot of properties in western Canada and a lot in the Fort Macmurray,Alberta tar sands area.The occupancy rates have gone down and so has the valuation on the properties.A year ago Temple was trading in the $5 to $6 area.But it has fallen quickly to the $.90 to $1.00 price range. Yet Temple continues to have a lot of good properties.And so far Temple continues to pay a small dividend that earns a 11% yield.
Morguard Reit becomes asset Manager
Morguard(MRC),a $8 billion reit, has been quietly acquiring Temple Hotel shares.Temple Hotels had an independent asset manager called Shelter Corporation.But Temple is running out of money to manage Shelter and so has made a deal to assign Shelter and any indebtedness to Morguard.As it turns out there is no indebtedness.Shelter has a revolving line of credit to handle any obligations that need to be carried out.This is also assigned to Morguard but there is no indebtedness here either.All TPH officers will resign by April1 ,2016 and give a release of their obligations.
The Take Over Bid
Further to that Morguard announced that it had bought 7 million shares at $1.07 a share.Now Morguard owns almost 31 million TPH shares and effectively 40% of Temple Hotels shares. Temple Hotels has a market capitalization of $70 million but the book value of assets is about $740 million with shareholder equity of about $131 million.This blog sees this as a good opportunity for Morguard who needs only another 11% of TPH shares to own 51%.A full 35% of outstanding shares are in the hands of the public. So it is certainly possible for Morguard to take control now and it has given an Early Warning release of a possible takeover bid.Given the price to book value ratio and the substantial dividend that Temple still pays investors might not be so eager to part with their shares.Morguard paid $1.07 for their block of 7 million shares and may well pay up to $1.20 to $1.25 for the control block.This blog suggests that investors wait and see what Temple management will do as they still have a lot of good properties.But it is also true that many of their properties are in the Fort Macmurray area and the occupancy rate is not very stable yet.
use Blogdaleupsome for analysis of reits;see Blogdaleupsome for financial analysis of reits; this blog has analysis of Cdn.reits
Morguard Reit becomes asset Manager
Morguard(MRC),a $8 billion reit, has been quietly acquiring Temple Hotel shares.Temple Hotels had an independent asset manager called Shelter Corporation.But Temple is running out of money to manage Shelter and so has made a deal to assign Shelter and any indebtedness to Morguard.As it turns out there is no indebtedness.Shelter has a revolving line of credit to handle any obligations that need to be carried out.This is also assigned to Morguard but there is no indebtedness here either.All TPH officers will resign by April1 ,2016 and give a release of their obligations.
The Take Over Bid
Further to that Morguard announced that it had bought 7 million shares at $1.07 a share.Now Morguard owns almost 31 million TPH shares and effectively 40% of Temple Hotels shares. Temple Hotels has a market capitalization of $70 million but the book value of assets is about $740 million with shareholder equity of about $131 million.This blog sees this as a good opportunity for Morguard who needs only another 11% of TPH shares to own 51%.A full 35% of outstanding shares are in the hands of the public. So it is certainly possible for Morguard to take control now and it has given an Early Warning release of a possible takeover bid.Given the price to book value ratio and the substantial dividend that Temple still pays investors might not be so eager to part with their shares.Morguard paid $1.07 for their block of 7 million shares and may well pay up to $1.20 to $1.25 for the control block.This blog suggests that investors wait and see what Temple management will do as they still have a lot of good properties.But it is also true that many of their properties are in the Fort Macmurray area and the occupancy rate is not very stable yet.
use Blogdaleupsome for analysis of reits;see Blogdaleupsome for financial analysis of reits; this blog has analysis of Cdn.reits
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