KEYreit and Plazacorp Enter into Revised Definitive Support Agreement

KEYreit (KEY reit) announced that it has entered into an amended and restated support agreement (the Amended Support Agreement) with Plazacorp Retail Properties Ltd. (Plazacorp) to sell KEYreit for $325 million, including assumed debt, pursuant to which Plazacorp will make a take-over bid to acquire 100% of the issued and outstanding units of KEYreit for an increased purchase price, at the option of each unitholder, of $8.35 per unit in cash, subject to a maximum aggregate cash amount of approximately $62 million, representing approximately 50% of the consideration, 1.7041 Plazacorp shares or any combination thereof, subject to proration (Plazacorp's Increased Offer). The transaction values KEYreit's equity at approximately $124 million.
The purchase price of $8.35 per KEYreit unit to be offered by Plazacorp represents a premium of 35% to the closing price of the KEYreit units on the Toronto Stock Exchange on January 28, 2013, the last trading day before Huntingdon Capital Corp. announced its intention to make an unsolicited partial offer for KEYreit units, and a considerably more attractive offer than Huntingdon's unsolicited amended offer of $8.00 per unit (Huntingdon's Amended Offer).
In light of Plazacorp's Increased Offer, KEYreit advises unitholders not to tender to Huntingdon's Amended Offer and to withdraw units that have already been tendered. Unitholders holding units through a dealer, broker or other nominee should contact such dealer, broker or nominee to withdraw their KEYreit units. For further details as to why the KEYreit Board of Trustees unanimously recommends that unitholders reject Huntingdon's Amended Offer, KEYreit encourages unitholders to read the notice of change to the trustees' circular, which is expected to be filed shortly.
"When Huntingdon started this process by launching its original unsolicited offer of $7.00 per unit, we maintained that the company is worth significantly more than $8.00 per unit and I want to congratulate the Special Committee on doing an excellent job of managing this process to achieve a value of approximately $325 million for KEYreit" added John Bitove, Chief Executive Officer of KEYreit.
Board unanimously recommends unitholders ACCEPT Plazacorp's Increased Offer
The Board of Trustees of KEYreit, based on the unanimous recommendation of the special committee of the Board and upon consultation with its financial and legal advisors, has unanimously determined that Plazacorp's Increased Offer is fair, from a financial point of view, to KEYreit unitholders and is in the best interests of KEYreit and its unitholders. The Board will therefore unanimously recommend that unitholders accept Plazacorp's Increased Offer.
"We are very pleased that Unitholders will benefit from an increase of $0.35 in the revised offer price, making Plazacorp's Increased Offer of $8.35 per unit a significant achievement from our value maximization process" said Donald Biback, Chairman of the Board of Trustees of KEYreit.
Details of Plazacorp's Increased Offer
Plazacorp's Increased Offer remains subject to applicable regulatory approvals and the satisfaction of certain closing conditions customary in transactions of this nature, and has a minimum tender condition of 66 2/3% of the outstanding units on a non-diluted basis. In light of the increased offer price, the Amended Support Agreement also provides for an increase in the break fee payable to Plazacorp from $5 million to $6.5 million, if the proposed transaction is not completed in certain specified circumstances.  A copy of the Amended Support Agreement will be available on KEYreit's website and on SEDAR at
Plazacorp's Increased Offer will be carried out by way of a take-over bid.  It is expected that the offer will be mailed to unitholders early-to-mid April 2013 concurrently with the mailing of KEYreit's trustees' circular recommending acceptance of Plazacorp's Increased Offer. The terms and conditions of the proposed transaction will be included in Plazacorp's take-over bid circular.  It is anticipated that units tendered to Plazacorp's Increased Offer will be taken-up in May 2013.
BMO Capital Markets is acting as financial advisor to the Special Committee and the Board of Trustees of KEYreit.  Legal counsel to the KEYreit Special Committee is Norton Rose Canada LLP and Stikeman Elliott LLP is legal counsel to KEYreit.

on April 4, 2013