Dundee announced in mid-January a deal to acquire Whiterock REIT (TSX: WRK-U, OTC: WRKUF). The deal is strongly accretive to Dundee, which will become Canada’s fourth-largest REIT with a broadly diversified commercial property portfolio.

The units currently yield north of 6.5 percent, and management will be in position to announce an increase when the new properties are absorbed. Dundee currently trades at just 1.16 times book value. 

Whiterock unitholders get either CAD16.25 per unit in cash (up to a total of 60 percent of the total bids) or 0.4729 Dundee units. That’s a premium of 20 percent to the pre-deal price. Whiterock rates a hold. The current price is close to the takeover price and there’s an effective 7.4 percent distribution reduction when the deal is completed, which is expected shortly after unitholders meet Feb. 27, 2012.

Dundee is a buy under USD35. For more on Dundee REIT, see the February High Yield of the Month feature.