VANCOUVER, Aug. 15 /CNW/ - Canadian Hotel Income Properties Real Estate
Investment Trust ("CHIP REIT") announced today that the takeover offer by
British Columbia Investment Management Corporation ("bcIMC") has been mailed
to unitholders and to holders of its 6.0% convertible debentures.
CHIP REIT trustees, who unanimously recommend acceptance of the offer,
mailed the Trustees' Circular contemporaneously. The offer is open for
acceptance until September 20, 2007, unless extended or withdrawn.
Unitholders who wish to accept the offer must properly complete and
execute a letter of acceptance and transmittal and deposit it, together with
certificates representing their units. The depositary of the offer is
Computershare Investor Services Inc. Debentureholders who wish to tender must
direct their broker, investment dealer, bank trust company or other nominee to
accept the offer in the manner required by their nominee.
As previously disclosed, the offer for units is for a cash price of
$19.10 per unit and represents an approximately 34% premium over the closing
price of CHIP REIT units on July 31, 2007, the last trading day before the
announcement of the offer, and a premium of approximately 22% over the closing
price of $15.68 on March 27, 2007, the last trading day prior to CHIP REIT's
announcement that it had established a special committee of trustees to review
strategic and structural alternatives for enhancing unitholder value. The
offer for CHIP REIT's 6.0% convertible debentures is for a cash price of
$1,625.53 per $1,000 debenture. The transaction has a total value of $1.2
billion, including debt.
In addition to the receipt of customary regulatory approvals, the
transaction is conditional upon 66 2/3% of the outstanding units being validly
tendered to the offer. The support agreement includes customary
non-solicitation and fiduciary out provisions, including a termination fee of
$25 million payable to bcIMC in certain circumstances.
The offer is unanimously recommended by the CHIP REIT board of trustees
and is expected to close during the third quarter of 2007. CHIP REIT's largest
unitholder, affiliates of the Belkorp Group, have entered into a lockup
agreement pursuant to which they have agreed to tender to the offer their 13.3
million units, representing approximately 27% of the Trust's total units
CHIP REIT unitholders will continue to receive their regular monthly
distributions until the day before the Initial Expiry Date under the offer.
CIBC World Markets Inc. has provided CHIP REIT's board of trustees with
its opinion that the consideration to be received by CHIP REIT unitholders and
6.0% convertible debentureholders is fair, from a financial point of view, to
unitholders and 6.0% convertible debentureholders of CHIP REIT.
Koffman Kalef provided independent legal counsel to the special committee
of trustees. Fraser Milner Casgrain LLP is legal counsel to CHIP REIT.
Avington and Bentall Capital LP acted as financial advisors to bcIMC and
Lawson Lundell LLP and Blake, Cassels & Graydon LLP provided legal advice.
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 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, HOT.db and HOT.db.a.
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
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: Azim Lalani, Director, Finance, CHIP REIT,
Phone: (604) 646-2447, Fax: (604) 646-2404, www.chipreit.com; Gwen-Ann
Chittenden, Manager Corporate Initiatives, British Columbia Investment
Management Corporation, Phone: (250) 507-0128, Fax: (250) 387-7874,