CANMARC adopts a new unitholder rights plan and extends separation time under unitholder rights plans

CANMARC Real Estate Investment Trust announced that it has adopted a new unitholder rights plan to enable a full consideration of strategic alternatives. The New Rights Plan is in addition to CANMARC's existing unitholder rights plan dated May 25, 2010  and is intended to ensure that in the context of the unsolicited take-over bid  for the trust units of CANMARC announced by Cominar Real Estate Investment Trust, acting through certain of its wholly-owned subsidiaries, the board of trustees of the REIT (the "Board") has sufficient time to appropriately evaluate the Cominar Bid  and is able to surface and explore all other strategic alternatives that are in the REIT's best interests.

Details of the New Rights Plan

The New Rights Plan is substantially similar to the Existing Rights Plan except that, among other things, the rights issued under the New Rights Plan become exercisable if a person acquires 15% or more of the CANMARC Units and the New Rights Plan does not permit a party to enter into lock-up agreements where the CANMARC Units subject to the lock-up agreement would, when combined with CANMARC Units already held by that party, exceed this 15% threshold. Any bid that meets certain criteria intended to protect the interests of all unitholders is deemed to be a "Permitted Bid". A Permitted Bid must be made by way of a take-over bid circular prepared in compliance with applicable securities laws and, in addition to certain other conditions such as the tender of at least 50% of the CANMARC Units, must remain open for 60 days. In the event that a take-over bid does not meet the Permitted Bid requirements of the New Rights Plan, the rights issued under the plan will entitle unitholders, other than any unitholder or unitholders involved in the take-over bid, to purchase additional CANMARC Units at a significant discount to the market price of the CANMARC Units at that time. A full copy of the New Rights Plan will be available on SEDAR at www.sedar.com.

To the knowledge of CANMARC, Cominar owned approximately 15.1% of the CANMARC Units as of December 6, 2011. Cominar and any other party holding in excess of 15% of the CANMARC Units will be grandfathered under the New Rights Plan. Accordingly, Cominar's ownership of more than 15% of the issued and outstanding CANMARC Units as at today's date will not trigger a Flip-In Event. However, if subsequent to today Cominar acquires more than a further 1% of the number of CANMARC Units then outstanding, a Flip-In Event will occur unless otherwise waived by the Board.

The New Rights Plan takes effect immediately and will be filed with the Toronto Stock Exchange for approval. The New Rights Plan does not replace or amend the Existing Rights Plan, which will remain in effect.

The Board has also determined to defer the "Separation Time" for rights under both rights plans in connection with the Cominar Bid to a later date to be determined by subsequent decision of the Board.

Review of the Cominar Bid

As disclosed on November 28, 2011, the Board has formed a special committee of independent trustees (the "Special Committee") to, among other things, consider and review the Cominar Bid and review and pursue any other alternatives that may be in the best interests of the REIT. The Board will provide unitholders with its recommendations in relation to the Cominar Bid by way of press release and trustees' circular as contemplated by securities laws.

"Since becoming a publicly traded REIT in May 2010, CANMARC has met or exceeded its growth targets, with total returns outperforming both Cominar and the TSX REIT sub-index by substantial margins," said Jim Beckerleg, President and Chief Executive Officer of the REIT.  "CANMARC has established itself as a premier growth REIT, based on our ability to find and close quality acquisitions and to manage and create organic growth throughout our portfolio.  Any bid for this REIT must fully reflect the value that this management team and Board have consistently built for CANMARC unitholders."

"Our unit price has traded above the bid price since the unsolicited bid was announced early last week - a reflection of the intrinsic value of the REIT. The Special Committee is in charge and is working diligently to move this process forward for the benefit of unitholders.  The Board, our Special Committee and our Management team are all committed to seeking the best possible result for the REIT."

"By adopting the New Rights Plan, we are providing our Special Committee with the time needed to consider and potentially pursue alternatives to the Cominar Bid in the interest of maximizing unitholder value.  As such, we strongly urge unitholders not to sell or tender their units until the Special Committee has completed its work," concluded Mr. Beckerleg.

 

on December 9, 2011