Q: I have seen tweets here and there that Artis is accumulating units of Dream office. What would the motivation behind this? Thanks for any insight you can provide.
5i Research Answer:
AX has been buying, and owns close to 21% of D.UN. At 20% ownership, new rules apply, as it is now considered a shareholder of influence. Its average purchase price recently is not far off the current market price. Both companies are quite small, and this could be a prelude to a possible merger or takeover. But it could also not mean anything other than an investment by AX.UN. It is not forthcoming with any explanation and is not required to do so. D.UN is very cheap at 6.5X cash flow, but its valuation is about the same as AX.UN's. Even if AX has overtures towards D.UN, REITs tend to make corporate moves very slowly, and we would certainly not expect anything imminently.