How Pure REIT got put in play

second proposal — which prompted a response from the target: Still inadequate.

Vision Capital Corp., which manages funds that own 7.26 per cent of the REIT, then entered the fray. Vision had a different view and urged fellow unit holders to voice their frustration to the company.

Vision’s message was direct: The board can’t simply say the proposal is inadequate, but needs to engage in discussions with Electra and try to negotiate a higher price.

By failing to engage with Electra, the company was “serving to entrench management and the Board by ignoring or putting off a compelling opportunity for unit-holders that would supplant them,” Vision said in a release.

Other Vision unit-holders responded. “I received about 30 calls,” from a mix of institutional and retail investors, said Jeffrey Olin, chief executive at Vision Capital.

Vision issued a couple of warnings to the company: If, they said, the proposed price of US$7.59 was inadequate, then that price should set a level below which Pure Multi-Family should not issue equity; and, if things don’t change, Vision, on behalf of the many shareholders it has heard from, would lead a proxy contest.

Vision liked what Electra was proposing. The offer was at a healthy premium (about 25 per cent above the recent market price) and it represented a premium to