The Merge of Trizec and Horsham

Essay by Anonymous UserUniversity, Bachelor'sA-, November 1996

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The real estate industry has been hit hard in the 1990's. Many companies have

been struggling to maintain their position in a rapidly decreasing real estate market. The

largest Canadian based real estate company to experience an accumulation of debts is, the

once Calgary based, Trizec Corporations.1 Trizec Corporations is experiencing over 600

million dollars worth of outstanding debts and was near bankruptcy until the Toronto

based investment group, Horsham Incorporated, invested 600 million dollars in return for

43% of the company in 1994.2 The merge between Trizec Corporations and Horsham

Incorporated would benefit both companies and propel these two companies into future

European projects.

Trizec Corporations was established in 1960 in Calgary, Alberta. Now, under the

control of Gregory Wilkins, Trizec is the countries largest publicly traded real estate

group.3 Their assets consist of 85 properties world wide, including Place Ville Marie in

Montreal and the U.S. based Hahn Company.4

Horsham Incorporated is led by Peter Munk who owns 10% of the equity and 80%

of votes through ownership of multiple voting shares. Horsham Incorporated has assets

including Clark Refining and Marketing Incorporated, 20% of American Barrick and real

estate in Berlin.5

The proposal in 1994 had Horsham paying 500 million dollars to receive a portion

of the debt that is convertible to common shares and then another 100 million dollars for

additional equity. The deal put a total value of 1.2 billion dollars into debt and

outstanding equity in Trizec.6 Horsham now owns 48% of Trizec and is trying to acquire

52% which was recently approved by the boards of both companies. The new company

consisting of these two groups will be renamed Trizec Hahn Corporation.7

Both companies feel that the merge would benefit their future expansions because

by investment from an outside source Trizec would be...