Artis REIT (AX.UN) announced on September 15, plans to merge with RFA Capital to form RFA Financial.
Other than the initial press release and investor presentation, no additional information has been posted on SEDAR+.
The units have dropped from ~ $7.40 to ~ $6.80.
Closing date for the merger was stated as Q1 2026
Questions
1 - When would Artis post the "Arrangement Agreement" on SEDAR+ outlining the full details of the merger?
2 - What are your current thoughts on the merger?
3 - In these types of transactions is it better to sell now, if you don't like the transaction or wait until further details are known.
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It is quite a bizarre and unique proposal, essentially converting a REIT to a diversified financial services company. It does have support of 39% of AX.UN holders. Bizarre does not always mean 'bad', but it will really be determined by what the merged company does post-closing. We would expect most of AX assets to be sold off, and prices received may be quite variable. The distribution will become an eligible dividend, which should be positive for shareholders. It will be a much larger entity, but completely different from what AX is now. Analysts don't seem to like the deal, and AX has already seen some downgrades. We will need to wait for the full offering documents. These can take two weeks or so, typically, to come out after an offer. AX may not have had a lot of better options, considering its real estate exposure and small size. It's probably a done deal, but we would still hold for now to get full info here.