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TORONTO-Industrial specialist Summit Real Estate Investment REIT has agreed a C$C3.37-billion ($3.96-billion) takeover by global giant ING Real Estate. Summit is the fourth largest REIT by market value on the Toronto Stock Exchange and Canada's largest owner of industrial investment property. It has properties in every province except Newfoundland. The deal will give ING a platform in Canada and boost its profile here. Properties will be held equally by ING Real Estate BV, based in the Netherlands, and ING Industrial Fund, a limited partnership that trades in Australia.

The proposed deal, announced after the markets closed Wednesday, is the result of an unsolicited offer made by a unit of ING Groep NV in June, Summit chief executive officer Lou Maroun says. It also reflects a premium of 17.9% on Wednesday's closing price of shares in Summit and analysts suggest it could provide a new benchmark for valuations in the REIT market.

Maroun says the ING bid was considered by a committee of independent trustees, who unanimously supported the offer after other possible bidders were contacted by the firm's advisers, Brascan Financial. The deal, which carries a break fee of $43 million, requires the approval of two-thirds of shareholders but, given the size of the premium, the board is confident it will secure approval.

Analysts suggest the proposed privatization of the REIT reflects the strong appetite of private investors--in particular overseas players--for real estate assets. They expect more deals this year and suggest these could lead to higher valuations on the remaining publicly traded real estate firms. Despite public concern about foreign takeovers in Canada, federal officials have recommended recently that Ottawa encourage more foreign takeovers and investment.

Instant Insights /

Summit Agrees to $4B Takeover by ING

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