RE:RE:RE:More BNS 1) RE. PRIVATIZATION:
I also think privatization, though a possible option, is unlkely, but not because CAR.UN is not trading at a very attractive discount right now - I bet if all CAR.UN's properties were sold right now on the open market, the money they would get would be far more in total than their current market cap. These are residential properties, many of which are in big cities, which tend to provide much more stable (and growing) cash flow than say, retail or office properties. Plus, if I'm not mistaken, CAR.UN also owns land on which they could build additional buildings, but I think they are having trouble getting permitted for the builds due to surrounding residents not wanting apartment buildings build near their homes. Even so, I bet the market value of these lots are worth a lot if CAR.UN just sold them to a developer to buIld new, single, detached homes or condos to sell to homeowners.
The problem re.a private takeout of the entire REIT as I see it is the size of the company. Even though I think CAR.UN is signficantly undervalued, the current market cap according to TMX Money is still approximately 9B today. Management would likely be looking at say, a 25% premium to the current unit price, which would make the total price tag over 11B. How many private equity firms (alone or together in a consortium) in the residential real estate space would be able to raise this much money to make the purchase......?
2) RE. SHARE BUYBACKS:
CAR.UN just recently got approval for the NCIB (commencing March 24, 2022 to March 23, 2023), so it's only been about 3 weeks (with just 7 days in March) and thus still very early innings, though I do agree the current unit price looks very appealing for buybacks. Also, CAR.UN just purchased a luxury six-building package in Quebec in early March, so they have just deployed a sizeable amount of capital with this purchase. However, I believe they still have the financial capability to buy back shares or purchase more new additions to their portfolio of buildings - just depends how management wishes to deploy the cash.