| TrizecHahn wants to sell showpiece Toronto site Garry Marr Financial Post December 20, 2001 In the midst of a major corporate shakeup, TrizecHahn Corp. confirmed yesterday it is trying to sell the land for its 1.3-million-square-foot office project in downtown Toronto. The move would basically take the real estate giant completely out of the office building market in Canada. Sources said the company is negotiating with Gentra Inc., a Toronto firm that has purchased a number of TrizecHahn properties, including Bankers Hall in Calgary. Gregory Wilkins, president of TrizecHahn, would not say who the company is negotiating with or what price range will be set. "We have had discussions with respect to Bay-Adelaide Centre. Having sold our Canadian holdings, we don't have the same infrastructure [to build it]," said Mr. Wilkins. TrizecHahn stock continues to slump and is off almost 3% this year despite the fact the Toronto Stock Exchange real estate sub index is up almost 15% during the same period. Last week, billionaire Peter Munk said he was stepping down as chief executive of TrizecHahn, frustrated by the company's moribund stock price. Yesterday, an apologetic Mr. Munk took the phone lines for a conference call with analysts and was brutally honest about his own failures at the helm. "Someone has to take responsibility for that kind of loss of confidence. Someone has to take responsibility for not producing results in this market, a particularly strong and buoyant one," said Mr. Munk. "There's clearly a line of responsibility leading directly to the man on the top, and to the extent that I was the chief executive officer, I take full responsibility for having produced this miserable result for my shareholders." Mr. Munk, who will remain chairman, took the conference call alone, without Christopher Mackenzie, the newly appointed chief executive. He said he had thought about major changes as early as four or five months ago. "We've [created value] in the hotel business, the gold business and intended to do it in the real estate business, but we have fallen far short in the past two years," said Mr. Munk, who created TrizecHahn by merging Horsham Corp. and Trizec Corp. in 1996. He started Barrick Gold Corp. in 1979 and made his money when the company's holdings in Nevada were discovered to have reserves of 933 tonnes, valued at $11-billion in 1986. But the elderly Mr. Munk now appears to be stepping back, having said as much to analysts in the call. "At my stage of life, this is a traumatic situation, particularly because the underlying performance of a group and assets have in no way been challenged," said Mr. Munk. "At my age, this portion of Trizec represents the summary of my life's professional work. It was clear that while there were a number of options available, one was the simplification of the company." Last month, TrizecHahn first offered up the new vision of the company. On one side would be its U.S. office holdings, which would be put in a real estate investment trust, and on the other, its carrier hotels, buildings that serve as telecommunications hubs. By the first quarter of 2001, the two sides will have separate balance sheets. Within 12 to 24 months the two will be separate, publicly listed companies. It was in April of this year that TrizecHahn first said it was selling its Canadian office property assets and investing part of the money in the carrier hotel business. Of the $1.7-billion raised from the sale, US$160-million was earmarked for a one-third investment in Global Switch International Ltd., with another US$500-million planned for share repurchase. Another US$200-million was for high-tech initiatives. Mr. Wilkins, who has had a 19-year business relationship with Mr. Munk, said a new CEO will allow Mr. Munk to step back a bit, as he has done with Barrick. |