Trizec Corp. Essay, Research Paper
The real estate industry has been hit hard in the 1990 s. Many companies have
been struggling to maintain their position in a rapidly decreasing real estate market. The
largest Canadian based real estate company to experience an accumulation of debts is, the
once Calgary based, Trizec Corporations.1 Trizec Corporations is experiencing over 600
million dollars worth of outstanding debts and was near bankruptcy until the Toronto
based investment group, Horsham Incorporated, invested 600 million dollars in return for
43% of the company in 1994.2 The merge between Trizec Corporations and Horsham
Incorporated would benefit both companies and propel these two companies into future
European projects.
Trizec Corporations was established in 1960 in Calgary, Alberta. Now, under the
control of Gregory Wilkins, Trizec is the countries largest publicly traded real estate
group.3 Their assets consist of 85 properties world wide, including Place Ville Marie in
Montreal and the U.S. based Hahn Company.4
Horsham Incorporated is led by Peter Munk who owns 10% of the equity and 80%
of votes through ownership of multiple voting shares. Horsham Incorporated has assets
including Clark Refining and Marketing Incorporated, 20% of American Barrick and real
estate in Berlin.5
The proposal in 1994 had Horsham paying 500 million dollars to receive a portion
of the debt that is convertible to common shares and then another 100 million dollars for
additional equity. The deal put a total value of 1.2 billion dollars into debt and
outstanding equity in Trizec.6 Horsham now owns 48% of Trizec and is trying to acquire
52% which was recently approved by the boards of both companies. The new company
consisting of these two groups will be renamed Trizec Hahn Corporation.7
Both companies feel that the merge would benefit their future expansions because
by investment from an outside source Trizec would be able to improve their position in
the real estate market. The deal would also allow Trizec to keep their management in
control. Horsham believes that an investment in the largest real estate market in Canada
would initiate an attempt to salvage the real estate market.8
The merge of these two companies would also allow both Horsham and Trizec to
become more accessible to the European market. Horsham is using Trizec s real estate
advantage to expand in retail and commercial industries in Germany, Hungary, and
Central Europe. The major project that Horsham is now involved in is in Ludwigsfelde,
Germany. If successful Horsham will own
from a member of the royal family. Prince Charles will invest in the Horsham project in
order to improve the urban environment of Germany. Trizec is using the European
connections of Horsham to propel themselves into the real estate market of Europe.
Trizec has already been working with Polus Investments Ltd. of Budapest, therefore, the
two companies are planning on working independently on their initial projects in Europe.9
Trizec Corporations and Horsham Incorporation are now working together and
have expanded into Europe. A once struggling Trizec has now been saved by Horsham
and is ready to re-establish themselves in the Canadian real estate market. Trizec Hahn
Co. has now become the company that will lead the global real estate market into the next
millennium.
Endnotes
1Kimberley Noble, Horsham Throws Trizec a Lifeline, The Globe and Mail,
29 March 1994, sec.B, p. 1,14.
2Kimberley Noble, Horsham Throws Trizec a Lifeline, The Globe and Mail,
29 March 1994, sec B, p. 1,14.
3Alan Freeman, Horsham Properties Brings Royal Touch to German Project,
The Globe and Mail, 4 October 1996, sec B, p. 1,12.
4John Meyer, Trizec- A Tradition of Excellence (Calgary: Corporate and Public Relations, 1985), 11.
5Kimberley Noble, Horsham Throws Trizec a Lifeline, The Globe and Mail,
29 March 1994, sec B, p. 1,14.
6Kimberley Noble, Horsham Throws Trizec a Lifeline, The Globe and Mail,
29 March 1994, sec B, p. 1,14.
7 Horsham Offer for 52% of Trizec Approved, The Globe and Mail,
30 September 1996, sec B, p. 10.
8Kimberley Noble, Horsham Throws Trizec a Lifeline, The Globe and Mail,
29 March 1994, sec B, p. 1,14.
9Alan Freeman, Horsham Properties Bring Royal Touch to German Projects,
The Globe and Mail, 4 October 1996, sec B, p. 1,12.
Bibliography
Freeman, Alan. (1996, October 4). Horsham Properties bring royal touch to
German project. The Globe and Mail, sec. B, p.1,12.
Horsham offer for 52% of Trizec approved. (1996, September 30). The Globe
and Mail, 10.
Meyer, John. (1985). Trizec-A Tradition of Excellence. Calgary: Corporate and
Public Relations.
Noble, Kimberley. (1994, March 29). Horsham throws Trizec a lifeline. The
Globe and Mail, sec. B, p. 1,15.
Robertson, Hugh. (1995). The Research Essay. Toronto: McGraw-Hill Ryerson
Ltd.
The Merge of Trizec and Horsham
Lewis Leon
100027372
Busi 1706 AO
Prof. Fraser Dunford
October 10, 1996