VANCOUVER, March 28 /CNW/ - Canadian Hotel Income Properties Real Estate
Investment Trust ("CHIP REIT") today announced it has established a special
committee of independent trustees to advise the board on strategic and
structural alternatives for enhancing unitholder value. CHIP REIT's largest
unitholder, the Belkorp Group, is supportive of this process.
The committee, which was formed in early March, is chaired by Janice
Rennie and includes Rhys Eyton and Tom Lindsay. Options under the committee's
review may include a possible restructuring, amalgamation, acquisition, or
sale of some or all of the Trust's assets, or any other alternative which may
be in the best interest of unitholders.
The Special Committee has engaged Koffman Kalef to provide independent
legal counsel and is in the process of selecting a financial advisor or
advisors to assist in this review. Fraser Milner Casgrain LLP is legal counsel
to CHIP REIT.
"We initiated this process in response to the considerable appetite
strategic and financial buyers have shown in recent months for Canadian hotel
properties," said Ms. Rennie, Chair of the Special Committee. "CHIP REIT has
an excellent track record and a strong platform for continued growth as one of
Canada's leading owners and operators of hotel properties."
In making this announcement, CHIP noted that the proposed REIT rules
included in legislation tabled yesterday by the Department of Finance appear
to indicate that hotel properties may no longer qualify for REIT status if the
legislation takes effect, as proposed, in 2011. CHIP REIT reiterated its view,
stated in its 2006 Management Discussion & Analysis, that hotel values in
Canada are not dependent on the existence of hotel REITs, and that these
proposed tax changes have not impacted the inherent value of the hotels in the
CHIP REIT portfolio.
The Board of Trustees has not set any deadline for completing the review
of its strategic and structural options, and may ultimately determine that its
current business plan is the best means to build and deliver unitholder value.
CHIP REIT is an integrated hotel real estate investment trust focused on
upscale and mid-market 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, HOT.db and HOT.db.a.
This news release contains forward-looking information related to, but
not limited to, CHIP REIT operations, anticipated financial performance,
business prospects and strategies. 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 economic, competitive and lodging industry conditions.
Please refer to CHIP REIT's Annual Information Form, dated March 14, 2007,
which can be found on the Canadian Securities Administrators' System for
Electronic Document Analysis and Retrieval ("SEDAR"), for a list of the risks
inherent in the activities of the Trust. CHIP REIT disclaims any intention or
obligation to update or revise any such forward-looking statements, whether as
a result of new information, future events or otherwise.
For further information:
For further information: Kevin Grayston, Executive Vice President & CFO,
Phone: (604) 646-2447, Fax: (604) 646-2404, www.chipreit.com