Teranet Income Fund Board of Trustees Unanimously Recommends Unitholders Reject Borealis' Hostile Take-over Bid



    TORONTO, Sept. 26 /CNW/ - The Board of Trustees of Teranet Income Fund
(TSX: TF.UN) (the "Fund") has unanimously recommended that Unitholders reject
the unsolicited offer from Borealis Acquisition Corporation (the "Offeror"), a
special purpose investment entity managed by Borealis Infrastructure
Management Inc. ("Borealis"), and not tender their trust units of the Fund
("Trust Units") or Class B LP units of Teranet Holdings Limited Partnership
("Class B LP Units") to the offer.
    "We believe that the Borealis offer of $11.00 per unit is financially
inadequate, especially considering that in June 2008, Borealis represented
that it was prepared to offer $12.00 per unit," said Jon N. Hagan, Chair of
the Board of Trustees of the Fund. "The Fund and its financial advisors are
actively engaged in discussions with a number of third parties who have
expressed an interest in alternative transactions that may offer greater value
for Unitholders. We recommend Unitholders reject the Borealis offer and allow
this process to run its full course before taking any action."
    Added Aris Kaplanis, President and Chief Executive Officer of Teranet
Inc. ("Teranet"): "The Borealis offer does not reflect the full value of our
ongoing high-margin business, strategic acquisitions and initiatives, and long
term growth potential. Teranet is a unique company with strong
infrastructure-type characteristics built on top of a powerful technology
platform. We have identified opportunities to leverage our existing expertise
into new product categories and industries, such as financial services and
healthcare."

    Reasons for Rejection

    The Board of Trustees has carefully reviewed the offer dated
September 12, 2008 (the "Offer") and believes that the Offer is inadequate and
fails to provide full value for the Fund. The principal factors considered by
the Board of Trustees in concluding to recommend that Unitholders REJECT the
Offer and NOT TENDER their units include:

    
    -   The Offer is inadequate. The Board of Trustees believes that the
        Offer is inadequate. On September 25, 2008, each of the financial
        advisors provided their opinion to the Special Committee, the Board
        of Trustees and the Board of Directors to the effect that, as of that
        date and subject to the assumptions, limitations, and qualifications
        set out therein, the consideration offered to Unitholders pursuant to
        the Offer is inadequate, from a financial point of view, to
        Unitholders other than the Offeror, Borealis and OMERS. The full text
        of each of the opinions, setting out the assumptions made, matters
        considered and limitations and qualifications on the review
        undertaken in connection with each opinion, is included as an
        appendix to the Trustees' Circular, a copy of which will be available
        on SEDAR within 24 hours at www.sedar.com and on the Teranet website
        at www.teranet.ca.

    -   The Offer is less than what Borealis was previously prepared to
        offer. On several occasions in the past, Borealis has represented
        that it was prepared to acquire all of the Trust Units and Class B LP
        Units at a price of $12 per unit. This is described in detail in the
        Trustees' Circular under "Background to the Offer".

    -   Superior proposals delivering greater value for Unitholders may
        emerge. The Fund and the financial advisors are actively engaged in
        discussions with a number of third parties who have expressed an
        interest in considering alternative transactions involving the Fund
        that may offer greater value for Unitholders. Over 10 parties have
        executed confidentiality and standstill agreements with the Fund to
        date. The Board of Trustees is pursuing all such initiatives with the
        objective of maximizing value to all Unitholders.

    -   The Offer is opportunistic and disadvantageous to Unitholders. The
        Offer was made while Borealis was aware that a process to maximize
        Unitholder value had been initiated. This is described in detail in
        the Trustees' Circular under "Background to the Offer". Borealis was
        aware of the process as they were invited to participate in it, but
        declined to do so. The Offer is an opportunistic attempt to make a
        pre-emptive bid for the Fund and is disadvantageous to Unitholders
        since it is an attempt to circumvent the process that was underway. A
        number of parties are now participating in this process. The Fund
        believes that there are a number of parties that have the reputation,
        technical expertise, financial capability and capacity to ensure
        continued reliable, high quality service delivery by Teranet of the
        services for which it is responsible under its agreements with the
        Province of Ontario (the "Province").

    -   The Offer is highly conditional and not a firm offer. The Offer
        contains 18 conditions, some of which contain numerous sub-
        conditions, which must be satisfied or waived before the Offeror is
        obligated to take up and pay for any securities deposited under the
        Offer. A number of the conditions provide Borealis with broad, sole
        discretion and are not subject to any materiality thresholds or other
        objective criteria commonly found in other offers, in effect,
        providing Borealis the option to decline to proceed with the Offer.
        In particular, the Offer is conditional on the Province providing its
        approval of (i) the consummation of the Offer, (ii) the subsequent
        acquisition of all units that were not tendered to the Offer, (iii)
        the restructuring of the Fund and its subsidiaries, and (iv) the
        granting by the restructured Fund and its subsidiaries of security in
        their respective assets. To the Fund's knowledge, the Province has
        not provided its approval to Borealis and the Fund believes that it
        is unlikely that such approval will be granted before the Offer's
        current expiry time. Unlike most conditions under a take-over bid
        that may be waived, Borealis cannot waive the condition that the
        Province provide its approval.

    -   The Offer does not reflect the value of the Fund's strategic
        acquisitions and recent initiatives. The Offer does not reflect the
        intrinsic value of the units as it fails to take into account the
        value created for Unitholders as a result of the Fund's ongoing
        strategic growth initiatives. In addition to organic growth as a
        result of the increase and continued automation of the land parcel
        base, Teranet has identified a number of opportunities to leverage
        its existing expertise and product portfolio to adapt products for
        new customers and new applications. Teranet has also identified a
        number of opportunities to leverage its technology platform and
        strong relationships to expand into other industries and to provide
        new products for existing customers.

    -   The Offer is not a "permitted bid" under the Fund's Unitholder Rights
        Plan. Borealis could have structured its offer as a "permitted bid"
        under the Fund's unitholder rights plan, which is designed to provide
        the Board of Trustees and Unitholders with sufficient time to
        properly consider any take-over bid made for the Fund and to allow
        enough time for competing bids and alternative proposals to emerge
        pursuant to the process which is currently underway. However,
        Borealis chose not to do so and is seeking to limit the ability of
        the Board of Trustees to pursue superior transactions for the benefit
        of Unitholders.

    -   Rejection of the Offer by all of the Trustees, Directors and officers
        of Teranet. None of the trustees of the Fund, or the directors or
        officers of Teranet has accepted or intends to accept the Offer.
    

    The Board's recommendation, as well as a detailed discussion of its
reasons for rejecting the Borealis offer, is contained in the Trustees'
Circular, a copy of which will be available on SEDAR within 24 hours at
www.sedar.com and on the Teranet website at www.teranet.ca. Unitholders are
urged to read the Trustees' Circular in its entirety.

    To reject the Offer, Unitholders should do nothing.
    ----------

    How to Withdraw Units from the Borealis Offer

    Unitholders who have already tendered their Trust Units or Class B LP
Units to the Offer can withdraw them at any time before the units deposited in
acceptance of the Offer have been taken up by the Offeror, so long as the
units have not been paid for by the Offeror within three business days after
having been taken up. Unitholders who have tendered their Trust Units can
contact their broker, who will withdraw the Trust Units on their behalf.
Unitholders who have tendered their Class B LP units can contact the
depositary, Computershare Investor Services Inc. (Tel: 1-800-564-6253 or
1-514-982-7555; Email: corporateactions@computershare.com).

    About Teranet

    Teranet offers e-services to the legal, real estate, government,
financial and healthcare markets. Teranet provides exclusive access to
Ontario's Electronic Land Registration System ("ELRS"), enabling customers to
conduct electronic registrations as well as title and writ searches relating
to real property. Teranet has also leveraged its core competencies to create
electronic service offerings in complementary areas. Teranet's comprehensive
products and services include property information, transaction management,
collateral risk management, geospatial information, workflow software and
enterprise solutions. Teranet Income Fund units are listed on the Toronto
Stock Exchange under the symbol TF.UN. For more information about Teranet,
visit www.teranet.ca.

    Forward-Looking Statements

    This news release contains statements that, other than statements of
historical fact, may be forward-looking statements about the objectives,
financial condition and results of operations of the Fund. These statements
are forward-looking and reflect management's current views and are based on
certain assumptions and expectations. Actual results could be materially
different from expectations if known or unknown risks affect the business, or
if estimates or assumptions turn out to be inaccurate. No forward-looking
statement is a guarantee of future results. Investors are cautioned not to
place undue reliance on such forward-looking statements. Forward-looking
statements do not take into account the effect that transactions or
non-recurring items announced or occurring after the statements are made may
have on the business. Teranet disclaims any intention or obligation to update
any forward-looking statement even if new information becomes available, as a
result of future events or for any other reason, except as required by law.
These statements are subject to a number of risks described in the Risk
Factors section of the last quarter's MD&A, which is available on the Teranet
site at www.teranet.ca or at www.sedar.com. Risk Factors may cause actual
results to differ materially from those contained in forward-looking
statements.





For further information:

For further information: Tanis Robinson, Manager, Investor Relations,
(416) 643-1096, tanis.robinson@teranet.ca

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