Axia Real Assets LP has made a non-binding, fully financed offer to acquire all outstanding units of Plaza Retail REIT for $5.28 per unit in cash, valuing the REIT at approximately $1.23 billion, including about $670 million in debt.

Toronto-based Axia said it submitted the proposal to Plaza’s board of trustees on June 8. The offer represents a 20.8% premium to the REIT’s 90-day volume-weighted average trading price and a 19.5% premium to its June 8 closing price.

Axia said the proposed acquisition is not subject to financing or due diligence conditions and is backed by committed financing, including a commitment from a Canadian Schedule I bank. The firm said it has also secured financing to refinance any debt that may be accelerated if the transaction proceeds.

The company said Morguard Corporation, Plaza’s largest unitholder with an approximately 15.3% stake, supports the proposal and is prepared to vote its units in favour of the transaction if it is brought before unitholders.

Axia said it has been attempting to negotiate a transaction with Plaza for more than two years and has submitted several improved offers since May 2024. The company said it increased its offer from $4.70 per unit, proposed during an exclusivity period in December 2024, to the current $5.28 per unit, but alleged that Plaza’s board has declined to engage meaningfully or provide specific feedback.

“Axia is calling on unitholders to require that the board engage on Axia’s offer and take the necessary steps to complete the proposed transaction,” the company said.

Axia argued that its proposal offers unitholders immediate liquidity at a significant premium and is a better alternative than remaining invested in what it described as a small-cap, illiquid REIT with limited access to growth capital. Axia also cited Plaza’s unchanged distributions since 2018, a property portfolio that has shrunk to 190 assets from 253, and a persistent discount to net asset value as reasons for pursuing the acquisition.

Many of the REIT’s notable assets are located in secondary markets. The sites include: The Village Shopping Centre in St. John’s, NL; Les Promenades du Cuivre in Rouyn-Noranda, Que., and Eastcourt Plaza in Cornwall, Ont.; Miramichi Power Centre and Northumberland Square in Miramichi, N.B., and Northwest Centre in Moncton, N.B.

The proposed transaction remains subject to the negotiation and execution of a definitive agreement, regulatory approvals and other customary closing conditions. Axia said there is no assurance that a transaction will be completed.

Axia is headed by Managing Partner Greg Stevenson.

The REIT has not commented on the offer.

Plaza is a fully internalized REIT that is able to develop and redevelops its own assets. The REIT has $1.1 billion in assets and an additional $764 million of assets under management, according to its website.

Pictured: Eastcourt Plaza in Cornwall, Ont.

Photo: Plaza Retail REIT