RioCan Selling U.S. Holdings
Brookfield Real Estate Services (TSX: BRE, OTC: BREUF) approved a 4% increase to its annual cash dividend to C$1.30 per year, or a monthly payout of C$0.1083. The new dividend will be paid out in January 2016. This marks the second increase in the past 12 months, as Brookfield previously hiked its payment from C$0.10 to C$0.1042 in June 2015.
Under its Royal LePage and Via Capitale brands, Brookfield also announced it will purchase franchise agreements, representing 33 real estate operations and 459 realtors across Canada, for roughly C$6.6 million. The agreements, which are effective Jan 1, 2016, are estimated to generate a royalty stream of C$1 million annually.
RioCan REIT (TSX: REI-U, OTC: RIOCF) will sell its entire U.S. portfolio of 49 shopping centers in the northeast and Texas to Blackstone Group for $1.9 billion. This effectively ends all of its operations in the U.S., which represented about 18% of RioCan’s annual rental revenues. Management said that a weaker Canadian dollar made it more costly to expand in the U.S., and the company wanted to focus on getting more value out of its Canadian assets.
Due to the drop in the loonie in the past few years, the company will make a C$1 billion profit from the assets that it paid C$1.7 billion for in 2009.
The sale will help fund RioCan’s recent acquisition of 23 properties from Kimco Realty Corp. and help reduce its debt. RioCan recently completed the second phase of its transaction to acquire Kimco’s interest in the properties.
After abandoning its plans to enter the wireless market last year, Shaw Communications (TSX: SJR/B, NYSE: SJR) is buying Wind Mobile for $1.6 billion.
Toronto-based Wind Mobile is Canada’s fourth largest mobile operator based on the number of subscribers, which are approximately 940,000. The acquisition will put Shaw in direct competition with BCE, Rogers and Telus, which offer bundled packages of wireless, television, home phone and Internet.
After announcing plans to enter the wireless market in 2011, Shaw later bowed out by agreeing to sell its spectrum to Rogers.
Management said it has no plans to change Mobile’s current offerings or prices but instead will use its resources to build out Wind Mobile’s network. Shaw plans to roll out LTE across Wind Mobile’s networks by the end of 2017.
The acquisition is expected to close in the third quarter of 2016.
Vermilion Energy (TSX: VET, NYSE: VET) announced it will reduce capex spending for 2016 to $285 million, from a previous preliminary figure of $350 million. With the $65 million in savings, Vermilion expects funds from operations to fully fund its spending on exploration and development as well as its cash dividends. The revised budget represents a 41% decrease from the 2015 forecasted E&D budget of $485 million.
Despite the reduced spending, the company expects an impact of only 500,000 barrels of oil equivalent per day (boe/d) on its total production. This is a small fraction of its total production outlook, which ranges from 62.5 million to 63.5 million boe/d and is 15% higher than Vermilion’s production in 2015.
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