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File photo of Cominar's Michel Dallaire

Canmarc Real Estate Investment Trust has rejected an $838.2-million takeover bid by rival Cominar REIT , saying the bid is too low and is timed to make it difficult for anyone else to make a competing bid as the holiday season approaches.

"Cominar's unsolicited offer price is below the current trading price of Canmarc Units on the TSX and the market price is clearly indicating that Canmarc's high-quality assets and track record for growth are worth much more," Canmarc chairwoman Karen Prentice said in a statement Tuesday.

Canmarc has enacted a unitholder's rights or "poison pill" plan to help prevent hostile takeovers, which it said the Cominar offer violates. It added that the hostile bid was "opportunistic and is designed to take advantage of the difficulty that other potential counterparties could have in organizing their affairs through the holiday season."

Cominar, which recently increased its stake in Canmarc to 15.1 per cent, is offering $15.30 cash in for each unit of Montreal-based Canmarc it doesn't already own, or the option of taking 0.7 of a unit in Cominar for each Canmarc unit.

Units of Canmarc last traded at $16 Monday on the Toronto Stock Exchange, indicating investors feel that there could be a rival bid or that Cominar will be forced to boost its offer before unitholders will accept a deal.

"Since our IPO in May of 2010, we have substantially outperformed both Cominar and the S&P TSX REIT sub-index," said Canmarc president and CEO Jim Beckerleg.

"Unitholders should not expect less than a substantial premium for their units."

Canmarc said its board is "broadly canvassing other parties" who might be interested in making a better offer.

Both trusts focus on non-residential real estate.

The company continues to own 464 multifamily residential units, primarily a 27-storey tower in Montreal, in addition to its income-producing commercial properties totalling 8.7 million square feet of gross leasable area.

Before it was created as a separate trust in 2010, Homburg Invest acquired Canadian real estate fund Alex Nihon in 2007 after a protracted battle with Cominar.

While waiving the right to match Homburg's offer, Cominar agreed to buy 585,000 square metres of office and industrial properties of Alexis Nihon from Homburg for $592 million.

Canmarc is now independent operationally and financially from Homburg Invest, which filed for creditor protection.

Cominar is the largest commercial property owner in Quebec. It owns a real estate portfolio of 269 high-quality properties, consisting of 53 office, 55 retail and 161 industrial and mixed-use buildings.

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