Homburg Invest Receives Non-Binding Proposal from Controlling Shareholder

Homburg Invest Inc. (HII) announced that its Board of Directors received a non-binding proposal from Richard Homburg and Homburg Canada Incorporated (HCI) (a private company controlled by Mr. Homburg) to eliminate the control block in HII, internalize management and optimize the balance sheet, in accordance with the terms of their press release of today's date.  Mr. Homburg, through associated entities, is the controlling shareholder of HII.

The terms of the Proposal received would allow shareholders of HII to vote by class on the elimination of the dual class share capital structure through which Richard Homburg currently has voting control of HII. Richard Homburg has proposed to internalize HII's management by terminating the existing asset and property management agreement with HCI. An important part of the Proposal includes exploring alternatives to optimize the new entity's balance sheet. If implemented, it would result in the creation of a new publicly-listed entity.

The Board of Directors of HII has established an Independent Committee of the Board to review the Proposal or any alternatives available to the Company.  The Committee has engaged independent legal counsel and will seek to engage an independent financial advisor to assist it in evaluating the Proposal and any eventual transaction.

"The Board of Directors and the Independent Committee will consider the Proposal carefully in the best interests of all stakeholders, including minority shareholders", said Michael Arnold, Chairman of the Board of HII.

Terms and conditions of the Proposal remain subject to negotiation and all required regulatory approvals. Any agreed transaction resulting from the Proposal will be communicated to shareholders of HII in due course. There can be no assurance that an agreed transaction will result from this Proposal, and terms and conditions of an agreed transaction could vary from those contemplated by the Proposal.

HCI is a private company that is distinct from publicly traded Homburg Canada Real Estate Investment Trust, which is not a party to the Proposal.


on May 11, 2011