08:01 AM EDT, 10/08/2024 (MT Newswires) -- Telsec Property Corporation, the largest minority holder of Melcor Real Estate Investment Trust Units (MR-UN.TO), said it "categorically rejects" the Melcor Developments Ltd. ( MODVF ) takeout offer as outlined last month.

Telsec is urging all minority unit holders to support the position of minority unit holder Firm Capital which calls for a take out price at 95% of the REIT's current IFRS net asset value.

Telsec said it believes Melcor is trying to take advantage of minority REIT Unit Holders by trying to buy the real estate back at less than 50% of the Net Asset Value. "Having gotten investors to buy into the REIT at the Net Asset Value, they now won't buy them out on the same Net Asset Value basis. It added Melcor is not giving a potential buyer enough time to make an informed decision and is in conflict of interest by "sitting on both sides of the table, being a buyer and a seller".

Telsec said the "lowball offer" of $4.95 is a 45% discount to the REIT's Net Asset Value (NAV) of $9.09 per Trust Unit as issued by the REIT itself on July 30, 2024. In addition, it noted the REIT announced "several self-dealing initiatives that solely benefit the Melcor Parent at the expense of Unitholders". It added: "The $4.95 per unit offer is misleading as Melcor plans to keep the 2024 profits which we estimate at $0.59 per unit but unit holders only received $0.04 per unit. This puts the actual Melcor offer at $4.40 per unit."

"To suggest we are disappointed in Melcor is an understatement," said Kris van Grieken, President of Telsec Property Corp., in a statement. "Who knew that it wouldn't be an outside interest trying to take advantage of the low unit price, but rather it is the same group that spun the REIT out to the market in the first place. We feel betrayed."