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New Bidder for Teranet?

TORONTO (Reuters) – Hospitals of Ontario Pension Plan said on Tuesday it is considering making a bid for Teranet Income Fund (TF_u.TO: Quote, Profile, Research, Stock Buzz), already the target of a C$2 billion ($1.9 billion) hostile takeover bid planned by another Ontario pension plan.

“We have the opportunity to bid on the whole company and the financial capacity and wherewithal to do that,” said Andy Moysiuk, managing partner of HOOPP Capital Partners, HOOPP’s private equity unit.

HOOPP is Teranet’s biggest investor and holds 10.3 percent of all outstanding units in the electronic land-transfer company, which has a monopoly on the land registry in Ontario, Canada’s most populous province.

Borealis Infrastructure Management, the investment arm of the Ontario Municipal Employees Retirement System, said last week it planned to bid C$11 a unit plus C$470 million in assumed debt, for the company.

Teranet is coveted for its steady cash flow and derives a big chunk of its revenue from its exclusive rights to access Ontario’s electronic land registry, which it holds until 2017.

The company had retained RBC Dominion Securities Inc and CIBC World Markets Inc before Borealis made its intentions known to gauge whether selling the business would be the best way to maximize value for its unitholders.

Moysiuk said HOOPP is working with Teranet and its financial advisors as it considers a takeover bid, and it made a regulatory filing after the market close on Monday as part of the process.

While Borealis and HOOPP have announced their intention to consider bidding for Teranet, and more suitors are expected, no formal bid has actually been tabled.

“It’s kind of an interesting situation where there is a bidding war and there is no bid,” Moysiuk said.

Other names being mentioned as potential suitors include the Canada Pension Plan Investment Board, Public Sector Pension Investment Board and Ontario Teachers’ Pension Plan.

Units of Teranet closed up 9 Canadian cents, or 0.8 percent, at C$11.59 on the Toronto Stock Exchange on Tuesday. ($1=$1.07 Canadian) (Reporting by John McCrank; Editing by Peter Galloway)