Alexis Nihon Real Estate Investment Trust

Alexis Nihon Real Estate Investment Trust

February 20, 2007 09:34 ET

Alexis Nihon REIT Announces Termination of Combination Agreement With Cominar REIT and Execution of a Support Agreement for Homburg Invest's $18.60 All-Cash Offer

MONTREAL, QUEBEC--(CCNMatthews - Feb. 20, 2007) - Alexis Nihon Real Estate Investment Trust ("Alexis Nihon") (TSX:AN.UN) announced today that Cominar Real Estate Investment Trust ("Cominar") has waived its five-day right to match the all-cash offer from Homburg Invest Inc. ("Homburg") to acquire all the issued and outstanding units of Alexis Nihon that it does not already own at a price of $18.60 per unit (the "Homburg Offer").

Alexis Nihon has therefore terminated the combination agreement with Cominar and entered into a definitive support agreement with Homburg under which Alexis Nihon will support the Homburg Offer.

Cominar has also waived, under certain circumstances, its right to a $12.5 million termination fee but only in relation to the Homburg Offer.

The trustees of Alexis Nihon, after having received a fairness opinion from its financial advisor CIBC World Markets Inc., have unanimously determined (Robert A. Nihon abstaining) that as of the date hereof, the Homburg Offer is fair to the unitholders of Alexis Nihon and is in the best interests of Alexis Nihon and its unitholders, and unanimously recommend (Robert A. Nihon abstaining) to the unitholders of Alexis Nihon to accept the Homburg Offer and tender their units to the Homburg Offer.

Gerard A. Limoges, Chairman of Alexis Nihon's transaction committee, said, "Alexis Nihon's board of trustees unanimously supports the Homburg Offer on the basis that it provides excellent value to Alexis Nihon unitholders and reflects the strategic value of Alexis Nihon to Homburg as a platform for growth in the province of Quebec."

Full details of the Homburg Offer will be included in Homburg's offer and take-over bid circular which will be mailed in due course to unitholders of Alexis Nihon, together with the trustees' circular of Alexis Nihon recommending acceptance of the Homburg Offer.

The Homburg Offer will trigger the right of the holders of Alexis Nihon convertible debentures to request that their Alexis Nihon convertible debentures be purchased on the 30th day following the completion of the Homburg Offer for a price equal to 101% of the principal amount of each Alexis Nihon convertible debenture plus any accrued and unpaid interest thereon.

The support agreement between Alexis Nihon and Homburg contains customary provisions prohibiting each of Alexis Nihon and Homburg from soliciting any other acquisition proposal but allowing termination in certain circumstances, including receipt of an unsolicited bona fide acquisition proposal from a third party that its board of trustees, in the exercise of its fiduciary duties, and in accordance with the terms and conditions of the support agreement, finds to be superior to the Homburg Offer, subject to the payment by Alexis Nihon of a termination fee to Homburg of $12.5 million.

The support agreement also allows Alexis Nihon to continue to declare and pay its monthly cash distributions to its unitholders in the ordinary course of business, although Alexis Nihon's Distribution Reinvestment Plan shall remain suspended.

In view of the above, Alexis Nihon has cancelled its special meeting of unitholders scheduled for February 22, 2007.

Forward-looking Statements

This document may contain forward-looking statements, relating to Alexis Nihon REIT's operations or to the environment in which it operates, which are based on Alexis Nihon REIT's operations, estimates, forecasts and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict, and/or are beyond Alexis Nihon REIT's control. A number of important factors could cause actual outcomes and results to differ materially from those expressed in these forward-looking statements. These factors include those set forth in other public filings. In addition, these forward-looking statements relate to the date on which they are made. Alexis Nihon REIT disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

About Alexis Nihon REIT

The REIT currently owns interests in 65 office, retail, and industrial properties, including a 426-unit multi-family residential property, located in the greater Montreal area and the National Capital Region. The REIT's portfolio has an aggregate of 9.1 million square feet of leasable area, of which 0.4 million square feet is co-owned.

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