Brascade Corporation
TSX : BCA.PR.B

Diversified Canadian Financial II Corp.
TSX : DCC.PR.A

Diversified Canadian Financial II Corp.

December 13, 2006 17:48 ET

Brascade Corporation and Diversified Canadian Financial II Corp. Announce Shareholder Approval of Amalgamation

Brascade Also Announces Acquisition of 11.25 Million Shares of Brookfield Properties Corporation

TORONTO, ONTARIO--(CCNMatthews - Dec. 13, 2006) - Brascade Corporation ("Brascade") (TSX:BCA.PR.B) and Diversified Canadian Financial II Corp. ("DCF II") (TSX:DCC.PR.A) announced that their shareholders today approved an amalgamation of these two companies with Diversified Canadian Holdings Inc. (the "Amalgamation"), effective on or about January 1, 2007. Brascade also announced that it will acquire 11.25 million shares of Brookfield Properties Corporation (TSX:BPO)(NYSE:BPO) under an equity offering expected to close on December 20, 2006.

Amalgamation Approval

At a special meeting of Brascade shareholders held this morning, the Amalgamation was approved by the holders of Brascade's common shares, by the holders of its Class 1 senior preferred shares, Series B (the "Brascade Senior Preferred Shares") and by the holders of its Class 2 junior preferred shares, Series A, each voting separately as a class. In addition, the holders of all the company's shares, voting together, approved the continuance of Brascade under the laws of Ontario, to be effective prior to the Amalgamation.

At a special meeting of DCF II shareholders held this morning, the Amalgamation was also approved by the holders of DCF II's voting shares, by the holders of its Class A preferred shares (the "DCF II Senior Preferred Shares") and by the holders of its Class B participating capital shares, each voting separately as a class.

The amalgamated company will continue as a public company under the name Brascade Corporation and is expected to continue to serve as an investment company. The amalgamated corporation will have a larger capital base and a more diversified portfolio of investments than its predecessors, and should also benefit from reduced administrative, operating and regulatory costs.

In conjunction with this amalgamation, holders of the Brascade Senior Preferred Shares who are resident in Canada have the option to receive either (a) $40.00 in cash in Canadian funds per Brascade Senior Preferred Share they now hold, which is the redemption price for these shares as at January 1, 2007; or (b) 1.6 senior preferred shares of the amalgamated corporation having a redemption price of $25.00 per share in Canadian funds and paying quarterly dividends based on an annual rate of 4.70%. Residents of jurisdictions outside Canada will automatically receive on amalgamation $40.00 in cash per Brascade Senior Preferred Share they now hold.

Also in conjunction with this amalgamation, holders of the DCF II Senior Preferred Shares resident in Canada have the option to receive either (a) $25.00 in cash in Canadian funds per DCF II Senior Preferred Share they now hold, which is the redemption price for these shares as at January 1, 2007; or (b) one senior preferred share of the amalgamated corporation having a redemption price of $25.00 per share in Canadian funds and paying quarterly dividends based on an annual rate of 4.70%. Residents of jurisdictions outside Canada will automatically receive on amalgamation $25.00 in cash per DCF II Senior Preferred Share they now hold.

For both companies, the deadline for making these elections is Wednesday, December 20, 2006, although non-registered shareholders should contact their brokers as to any earlier deadlines imposed by their brokers. Redemption payments will be made as soon as possible after January 1, 2007 and share certificates representing the senior preferred shares of the amalgamated company to be issued on conversion will be distributed early in January 2007. Conditional approval has been received from the Toronto Stock Exchange to list these senior preferred shares under the symbol BCA.PR.A.

The boards of directors of both Brascade and DCF II also declared dividends on the Brascade and DCF II Senior Preferred Shares, respectively, accrued for the period up to the expected effective date of the Amalgamation, which will be paid with the regular quarterly dividends on December 31, 2006.

Acquisition of Shares of Brookfield Properties Corporation

On December 12, 2006, Brookfield Properties Corporation (TSX:BPO)(NYSE:BPO) announced the issue and sale of 30 million common shares at a price of US$38 per share and also announced that 11.25 million of these shares will be acquired directly or indirectly by Brookfield Asset Management Inc. (NYSE:BAM)(TSX:BAM). These shares will be acquired by Brascade Corporation, all the common shares of which are held by Brookfield Asset Management. The Board of Directors of Brascade and its committee of independent directors today approved this purchase at a total cost of approximately US$427 million. The purchase will be funded by cash on hand and, if necessary, funds borrowed from Brookfield Asset Management.

This acquisition will complement Brascade's existing portfolio of long-term natural resources and property investments. The acquisition is also consistent with the objectives of the amalgamated company.

Brascade Corporation currently holds investments in the forest products and property sectors. The common shares of Brascade are wholly owned by Brookfield Asset Management, an asset management company focussed on property, power and infrastructure assets.

DCF II owns a portfolio of preferred shares issued by companies within the Brookfield Asset Management group.

This news release contains forward-looking statements such as "will", "is expected" and "should". Both Brascade and DCF II caution that, by their nature, forward-looking statements involve risk and uncertainty and the companies' actual results could differ materially from those expressed or implied in such statements. Reference should be made to their most recent Annual Information Forms for a description of the major risk factors.

Contact Information

  • Brascade Corporation
    Alan Dean
    (416) 363-9491
    or
    Brascade Corporation
    Sachin Shah
    (416) 363-9491