Northview Apartment REIT valuation NVU.UN.TO

Northview Apartment REIT has agreed to purchase units at $36.25 unless elected to convert to High Yield Fund Units. Expected to convert 3rd quarter 2020.

TSX price today is $34.92. Is it worth purchasing units for a quick gain of $1.33 (3.8%) How do you know if the units you purchase have not already elected to receive High Yield Fund Units?

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Asked on August 8, 2020 7:06 am

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Hi Occovantijn,

If you are currently buying shares on the open market, than you are not buying shares that are converted as they would have no record of you, the unitholder having chosen that option. You would simply be among those to receive cash of $36.25 per share as the deadline to choose the convertable option was June 5, 2020.

The transaction is expected to close by the end of Q3 (September 30) so I suppose if you feel the 3.8% return in just under 2 months is 'worth' it, is entirely up to the individual. Of note, there is always a risk that the deal doesn't close but if that were the case, the spread would be significantly higher. As it stands, the market believes there is a high likelihood of the deal closing.

Mat

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Posted by Mathieu Litalien

Answered on August 9, 2020 8:06 am

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