First Capital REIT, KingSett Capital, and Choice Properties REIT announced Thursday that they have entered into an agreement where KingSett and Choice Properties will acquire First Capital in a unit and cash transaction valued at approximately $9.4 billion, including the assumption of certain debt.
Under the terms of the Arrangement Agreement, First Capital unitholders will receive consideration of $19.24 in cash and 0.3186 units of Choice Properties per First Capital unit, which represents total consideration of $24.40 per First Capital unit based on the closing unit price of Choice Properties on April 15, 2026. The Transaction Price represents a premium of 17% to First Capital’s 20-day volume-weighted average price through April 15, 2026, and a premium of 8% to First Capital’s Net Asset Value of $22.57 per unit. Additionally, the Transaction Price represents a premium of 12% and 21% to First Capital’s closing unit price and 90-day volume-weighted average price through April 15, 2026, respectively, according to a press release.
Upon close of the transaction, Choice Properties will acquire approximately $5.0 billion of high-quality retail assets from First Capital. KingSett will acquire approximately $4.4 billion of First Capital assets and all of First Capital’s issued and outstanding units.
Paul Douglas, Chair of First Capital’s Board of Trustees, said: “We are pleased to deliver immediate value to our investors through this Transaction. Supported by the recommendation of a Special Committee comprised of independent trustees, the First Capital Board believes this Transaction is in the best interests of First Capital unitholders. Accordingly, the Board recommends that unitholders vote in favour of the Transaction.”
“This is an excellent transaction for our investors, which recognizes their longstanding support and commitment to First Capital,” added Adam Paul, First Capital’s President and Chief Executive Officer. “I am deeply grateful to our employees – many of whom will continue to support the assets acquired by KingSett and Choice – as well as to my partners on the executive leadership team, who have remained singularly focused on what was in the best interests of First Capital unitholders, and whose diligence and work ethic were critical in bringing us to this point.”
Rob Kumer, Chief Executive Officer at KingSett Capital, said: “This Transaction comes at a time when we are seeing renewed optimism and positive momentum in Canadian real estate. We have partnered with Choice Properties to align the right assets with our respective strategies to deliver maximum value to First Capital’s unitholders. We look forward to working with First Capital’s tenants, partners and other stakeholders in the years ahead.”
Rael Diamond, President and Chief Executive Officer of Choice Properties, said: “This is an exciting and transformative transaction that will solidify Choice Properties as Canada’s leading REIT. Choice Properties is acquiring best-in-class, necessity-based neighbourhood shopping centres that will significantly strengthen our portfolio. We believe this is a unique and compelling opportunity that will increase our presence in urban markets and further diversify our tenant base. Importantly, we expect the combination of these assets with our existing portfolio will deliver enhanced long-term growth and value for our unitholders.”
The approximate $5.0 billion Choice Properties Acquisition Portfolio comprises approximately $4.8 billion, or 8.0 million square feet, of income producing assets, along with approximately $0.2 billion of properties under development. The Choice Properties Acquisition Portfolio is expected to generate full-year NOI of approximately $235 million in 2027, with an annual growth rate of approximately 3.5% in the near-term, said the news release.
Choice Properties intends to finance its acquisition of the Choice Properties Acquisition Portfolio through a combination of debt and equity. This includes the issuance of 68.6 million units of Choice Properties to First Capital unitholders valued at $1.1 billion based on Choice Properties’ closing unit price on April 15, a $0.6 billion equity investment from George Weston Limited for 38.0 million units, the assumption of First Capital’s $2.3 billion of outstanding unsecured debentures, and the assumption of approximately $0.4 billion of existing in-place mortgages. The remaining consideration is expected to be financed via the issuance of new unsecured debentures by Choice Properties, it said.
“Concurrent with Transaction completion, Choice Properties will assume First Capital’s $2.3 billion of outstanding unsecured debentures as successor entity to First Capital, in accordance with the trust indenture,” it said.
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