British Columbia Investment Management Corporation succeeds in bid for Canadian Hotel Income Properties Real Estate Investment Trust



    VICTORIA and VANCOUVER, Sept. 20 /CNW/ - British Columbia Investment
Management Corporation ("bcIMC") and Canadian Hotel Income Properties Real
Estate Investment Trust ("CHIP REIT") (TSX: HOT.UN, HOT.DB.A) announced today
that 44,360,142 units of CHIP REIT (approximately 88% of the total issued and
outstanding units) and $11,130,000 aggregate principal amount of CHIP REIT
6.0% convertible debentures (approximately 85.4% of the total issued and
outstanding 6.0% convertible debentures) were validly tendered to the
take-over bid made by BFO Acquisition Limited Partnership ("BFO LP"), an
indirect wholly-owned subsidiary of bcIMC, prior to the expiry time of 5:00
p.m. (Toronto time) on September 20, 2007. In addition, 1,348,435 units
(approximately 2.7% of the total issued and outstanding units) were deposited
to the bid under notices of guaranteed delivery prior to the expiry time.
    BFO LP has instructed the depositary that it will take up and pay for all
of the units and 6.0% convertible debentures validly tendered to the offer and
has extended the offer to enable those unitholders and debentureholders that
have not yet tendered to deposit their units or 6.0% convertible debentures to
the offer. The offer, as extended, will now expire at 5:00 p.m. (Toronto time)
on October 2, 2007. A notice of extension and variation will be mailed to CHIP
REIT unitholders and debentureholders as soon as possible.
    Following the purchase of validly tendered units and 6.0% convertible
debentures described above, BFO LP will own 44,360,142 units of CHIP REIT,
representing approximately 88% of the issued and outstanding units, and
$11,130,000 principal amount of CHIP REIT 6.0% convertible debentures,
representing approximately 85.4% of the aggregate principal amount of the
outstanding 6.0% convertible debentures.
    CHIP REIT unitholders and debentureholders who hold their units or 6.0%
convertible debentures through a broker or other financial intermediary will
receive payment of the purchase price through such broker or intermediary.
Unitholders holding units in registered form will receive payment directly
from the depositary. Payment is expected to be made on or shortly after
September 25, 2007.
    If BFO LP acquires not less than 90% of the outstanding units under the
offer as extended, it intends to use the compulsory acquisition provisions in
CHIP REIT's declaration of trust to acquire the remaining units. If less than
90% of the units are acquired under the offer as extended, BFO LP intends to
effect a subsequent acquisition transaction to acquire or cause the redemption
of the remaining units, as described in its take-over bid circular. Such a
transaction would be required to be approved by unitholders of CHIP REIT at a
special meeting.
    In addition, since not less than 66?% of the aggregate principal amount
of the 6.0% convertible debentures will be acquired by BFO LP under the offer,
BFO LP intends to amend the trust indenture governing such debentures to
permit a compulsory acquisition of the remaining 6.0% convertible debentures
in such circumstances. BFO LP expects to complete the compulsory acquisition
of 6.0% convertible debentures under the trust indenture, as so amended, as
soon as reasonably practicable following expiry of the offer.
    BFO LP expects the 6.0% convertible debentures to be de-listed from the
Toronto Stock Exchange as soon as practicable following completion of a
compulsory acquisition transaction as described above and intends to cause the
de-listing of the units from the Toronto Stock Exchange shortly after it
completes a compulsory acquisition or subsequent acquisition transaction as
described above.
    BFO LP first announced its intention to make the offer on August 1, 2007
and mailed its take-over bid circular to CHIP REIT unitholders and holders of
6.0% convertible debentures on August 15, 2007. Pursuant to the offer, BFO LP
offered to purchase for cash all of the outstanding units of CHIP REIT at a
price of $19.10 per unit and all of the 6.0% convertible debentures at a price
of $1,625.53 per $1,000 principal amount of debentures, plus an amount equal
to accrued and unpaid interest to (but excluding) September 20, 2007.
    Avington and Bentall Capital LP acted as financial advisors to bcIMC and
Lawson Lundell LLP and Blake, Cassels & Graydon LLP provided legal advice to
bcIMC in connection with the offer. Koffman Kalef provided independent legal
counsel to the special committee of trustees of CHIP REIT. Fraser Milner
Casgrain LLP is legal counsel to CHIP REIT, and CIBC World Markets Inc. was
financial advisor to CHIP REIT and the special committee. bcIMC has appointed
Georgeson Shareholder Communications Canada Inc. as information agent for the
offer. Any questions and requests for assistance with respect to the offer may
be directed to Georgeson toll free in North America at: 1-888-605-7640.

    About bcIMC

    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
www.bcimc.com.

    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.

    Disclaimer

    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
subsequent acquisition transaction. 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 results of any extension of the offer and 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, communications@bcimc.com, www.bcimc.com; Kevin
Grayston, Executive Vice President and CFO, CHIP REIT, Phone: (604) 646-2447,
Fax: (604) 646-2404, www.chipreit.com

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British Columbia Investment Management Corporation (bcIMC)

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