Trizec Corporations And Horsham Incorporated example essay topic

The Merge of Trizec and Horsham 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 realestate 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 into 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 the first outlet mall to receive endorsement 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 Plus 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.

Bibliography

1 Kimberley Noble, "Horsham Throws Trizec a Lifeline", The Globe and Mail, 29 March 1994, sec.
B, p. 1, 14.2 Kimberley Noble, "Horsham Throws Trizec a Lifeline", The Globe and Mail, 29 March 1994, sec B, p.
1, 14.3 Alan Freeman, "Horsham Properties Brings Royal Touch to German Project", The Globe and Mail, 4 October 1996, sec B, p.
1, 12.4 John Meyer, Trizec- A Tradition of Excellence (Calgary: Corporate and Public Relations, 1985), 11.
5 Kimberley Noble, "Horsham Throws Trizec a Lifeline", The Globe and Mail, 29 March 1994, sec B, p.
1, 14.6 Kimberley 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.
10.8 Kimberley Noble, "Horsham Throws Trizec a Lifeline", The Globe and Mail, 29 March 1994, sec B, p.
1, 14.9 Alan 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).