Firm Capital Realty interested in buying Becker Milk for about $38 million

TORONTO, Cananda – Shares in The Becker Milk Company Ltd. shot up more than 17 per cent Tuesday after Firm Capital Realty Partners said it was interested in buying the Ontario retail commercial property firm for about $38 million.

Toronto-based Firm Capital said it is prepared to offer about $21 per share if it can gain access to Becker’s data room to conduct due diligence and finalize its financing — access that Becker management has so far refused to grant.

At $21 per share, Firm Capital’s potential bid represents a 23 per cent premium to Becker’s closing price on Dec. 13 and a 35 per cent premium to its price before Becker’s board said it would consider a possible sale of the company.

Becker (TSX:BEK.B) announced plans in August to consider selling the company.

On the Toronto Stock Exchange, Becker stock closed up $2.95 at $20 in on Tuesday.

Firm Capital said in a news release that it has made several proposals to acquire Becker’s assets, but the target company has been unwilling to engage in meaningful discussions or grant access to its data room.

With no apparent alternative transaction, Firm Capital said it may take its offer directly to Becker shareholders.

Becker did not respond directly to the proposal from Firm Capital, but later issued a statement saying that PriceWaterhouseCoopers Real Estate Inc. had completed initial steps in exploring the possible sale of the company.

It said PWC had canvassed potentially interested parties and was now proceeding with discussions with a short list of potential acquirers.

“Interested parties who are on the shortlist have been granted access to the data room of the company,” it said.

Becker Milk Company owns and manages 67 retail commercial properties in throughout southern Ontario, with the majority of locations lease to Mac’s, which is owned and operated by Alimentation Couche-Tard (TSX:ATD.B). It earned nearly $420,000 on $2 million of revenues for the six months ended Oct. 31.