VICTORIA, Oct. 3 /CNW/ - British Columbia Investment Management
Corporation ("bcIMC") announced today that its indirect wholly-owned
subsidiary, BFO Acquisition Limited Partnership ("BFO LP"), has taken up and
paid for 2,880,418 units of Canadian Hotel Income Properties Real Estate
Investment Trust ("CHIP REIT") (TSX: HOT.UN, HOT.DB.A) and $936,000 aggregate
principal amount of CHIP REIT 6.0% convertible debentures that were validly
tendered to the take-over bid made by BFO LP on or after September 24, 2007
and prior to the expiry time of 5:00 p.m. (Toronto time) on October 2, 2007.
The offer has now expired.
As a result of its acquisitions under the offer, BFO LP owns
48,695,995 units of CHIP REIT, representing approximately 96.6% of the issued
and outstanding units, and $12,066,000 principal amount of CHIP REIT 6.0%
convertible debentures, representing approximately 92.5% of the aggregate
principal amount of the outstanding 6.0% convertible debentures.
The units were acquired for cash consideration of Cdn. $19.10 per unit.
The 6.0% convertible debentures were acquired for cash consideration of Cdn.
$1,625.53 in cash per $1,000 principal amount of 6.0% convertible debentures,
plus an amount equal to accrued and unpaid interest on the principal amount of
the 6.0% convertible debentures up to, but excluding, September 20, 2007, the
initial expiry date of BFO LP's offer.
The purpose of BFO LP's offer was to enable it to acquire all of the
units and 6.0% convertible debentures of CHIP REIT. Since BFO LP has acquired
not less than 90% of the outstanding units under the offer, it intends to use
the compulsory acquisition provisions in CHIP REIT's declaration of trust to
acquire the remaining units. BFO LP expects to initiate such a compulsory
acquisition within 30 days following yesterday's expiry of the offer.
In addition, since not less than 66 2/3% of the aggregate principal
amount of the 6.0% convertible debentures were acquired by BFO LP under the
offer, an extraordinary resolution to amend the trust indenture governing the
6.0% convertible debentures to permit a compulsory acquisition of the
remaining 6.0% convertible debentures in such circumstances has been approved
and the trust indenture has been so amended. BFO LP has completed such a
compulsory acquisition today. As a result of the compulsory acquisition, BFO
LP owns 100% of the aggregate principal amount of the outstanding 6.0%
Previously, in connection with the offer, BFO LP, bcIMC, in its capacity
as trustee of the Realpool Investment Fund, and CHIP REIT entered into a
support agreement on August 1, 2007, pursuant to which, among other things,
CHIP REIT agreed to recommend that holders of units and 6.0% convertible
debentures accept BFO LP's offer. In addition, on August 1, 2007, BFO LP and
bcIMC, as trustee for the Realpool Investment Fund, entered into a Lock-Up
Agreement with Belkin Enterprises Ltd. and certain of its affiliates, under
which Belkin and those affiliates agreed, subject to certain conditions, to
tender all units and 6.0% convertible debentures held by them to the offer by
bcIMC is an investment management corporation based in Victoria, BC. With
over $83 billion in assets under administration with global exposure, and
supported by industry-leading expertise, bcIMC offers fund management services
for all major asset classes, including currency and infrastructure investment.
bcIMC's clients include public sector pension plans, the BC provincial
government, public trusts and insurance funds. For more information, visit
BFO LP's principal place of business is located at Sawmill Point, 3rd
Floor, 2940 Jutland Road, Victoria, British Columbia V8T 5K6.
About CHIP REIT
CHIP REIT is an integrated hotel real estate investment trust focused on
mid-market and upscale full-service hotels. Through its large, diversified
portfolio, CHIP REIT provides investors with stable income and growth
potential through acquisitions, repositioning and franchising under banners
that include Delta, Radisson, Marriott and Hilton. CHIP REIT currently owns
and manages 32 hotels with approximately 7,700 guestrooms. In 2006, CHIP REIT
was named "Hotel Company of the Year" by Hotelier Magazine, becoming the first
REIT to win a Pinnacle Award in the hospitality industry's national
recognition program. CHIP REIT units and convertible debentures trade on the
Toronto Stock Exchange under the symbols HOT.un and HOT.db.a.
This news release contains forward-looking information related to, but
not limited to, the offer by BFO LP to acquire the units and 6.0% convertible
debentures of CHIP REIT and possible future transactions, including a
compulsory acquisition. Forward-looking information typically contains
statements with words such as "anticipate", "believe", "expect", "plan" or
similar words suggesting future outcomes. Such forward-looking statements are
subject to risks, uncertainties and other factors, which could cause actual
results to differ materially from future results expressed, projected or
implied by such forward-looking statements. Such factors include, but are not
limited to, the offeror's decision with respect to, or ability to implement, a
compulsory acquisition or subsequent acquisition transaction. bcIMC and BFO LP
disclaim any intention or obligation to update or revise any such
forward-looking statements, whether as a result of new information, future
events or otherwise, except as required by law.
For further information:
For further information: Gwen-Ann Chittenden, Manager Corporate
Initiatives, British Columbia Investment Management Corporation, Phone: (250)
507-0128, Fax: (250) 387-7874, firstname.lastname@example.org, www.bcimc.com; Kevin
Grayston, Executive Vice President and CFO, CHIP REIT, Phone: (604) 646-2447,
Fax: (604) 646-2404, www.chipreit.com