Toronto-based RioCan REIT (TSX: REI.UN) has reached an agreement that would see the retail-focused real estate investment trust secure complete ownership in the Georgian Mall in Barrie and Oakville Place in Oakville, according to court documents. The transaction is pending approval from the Ontario Superior Court.
In 2015, the Hudson's Bay Company (HBC) and RioCan formed a joint venture that saw HBC contribute 10 properties — five it owned via freehold (inclusive of the land) and five it owned via leasehold (not inclusive of the land) — and RioCan contribute 50% ownership stakes in the Georgian Mall and Oakville Place.
This joint venture became Hudson's Bay's primary real estate subsidiary and was placed under receivership earlier this year at RioCan's request after creditor protection proceedings for Hudson's Bay failed to yield any transactions for the joint venture's assets. The court-appointed Receiver is now working towards the ultimate goal of monetizing the joint venture's assets.
As first reported by STOREYS last month, RioCan entered into an agreement with the Receiver on August 14 that would see RioCan buy the joint venture's 50% ownership stakes in the two shopping centres. The remaining 50% ownership in both are already held by RioCan, thus the transaction would give complete ownership of the two malls back to RioCan. Transaction details were not outlined in last month, but were revealed this week when an application for court approval was submitted.
RioCan is paying $77,620,000 for the 50% stake in the Georgian Mall and $63,050,000 for the 50% stake in Oakville Place, for a grand total of $140,670,000.
As previously reported by STOREYS, the joint venture's ownership interest in the Georgian Mall is encumbered by a first mortgage in the original principal amount of up to $110,000,000 held by Desjardins as well as a second mortgage in the principal amount of $24,500,000 held by RioCan (RC Holding II LP). The joint venture's ownership interest in Oakville Place is encumbered by a first mortgage in the original principal amount of $95,000,000 held jointly by TD Bank and the Canada Life Assurance Company as well as a second mortgage for a variable amount also held by RioCan.
RioCan's bid would be satisfied by assuming the joint venture's 50% of the Georgian Mall first mortgage, repayment in full of the Georgian Mall second mortgage, assuming the joint venture's 50% of the Oakville Place first mortgage, and a cash consideration of $20,000,000.
The deal, however, gives the Receiver a 60-day period to seek out alternative superior transactions — similar to a go-shop period — concurrently with the transaction being advanced further following court approval. The 60-day period began on August 13 and concludes on October 13, with the Receiver retaining RBC Capital Markets as their advisor. If a superior transaction is found, RioCan will have 10 business days to match the offer and RioCan would be entitled to a break fee of 2% of the purchase price in the event that the superior transaction is successful.
"Due to the unique nature of the Co-Ownership Interests, the Receiver, in consultation with RBC CM, believes the number of parties that would potentially be interested in acquiring the Co-Ownership Interests is narrow, and that a focused and expedited solicitation process over a period of 60 days is appropriate in the circumstances — particularly when considering the HBC Sale Process previously conducted," said the Receiver in a report to the court dated September 15. "The Receiver understands some of these parties were already contacted during the HBC Sale Process, and signed non-disclosure agreements. As of September 5, 2025, RBC CM had completed its initial outreach regarding the Co-Ownership Interests and was in the process of following up with the parties."
The court approval application is set to be heard by the Ontario Superior Court on Monday, September 22.
