InnVest Real Estate Investment Trust
TSX : INN.UN

InnVest Real Estate Investment Trust

July 14, 2014 09:00 ET

InnVest REIT Announces Intention to Enhance and Extend Its Offer to Acquire up to $28,750,000 of Its 5.75% Series G Convertible Debentures and to Enhance Proposed Series G Indenture Amendments

TORONTO, ONTARIO--(Marketwired - July 14, 2014) - InnVest Real Estate Investment Trust ("InnVest") (TSX:INN.UN) announced today that it intends to increase the purchase price under its existing offer to purchase up to $28,750,000 of the outstanding principal amount of its Series G Convertible Unsecured Subordinated Debentures (the "Debentures") from $1,060 to $1,080 (the "Increased Offer Price") for each $1,000 in principal amount (the "Offer"), and proposes to amend the conversion price for each InnVest unit to be issued upon the conversion of one Series G Debenture under the trust indenture governing the Debentures to $7.50 rather than the $8.00 originally proposed (the "Indenture Amendments").

The Increased Offer Price represents a premium of $60 to the closing price of $1,020 on the Toronto Stock Exchange ("TSX") on June 16, 2014 (the last trading day before InnVest's initial announcement regarding its offer), and a premium of approximately $64 to the volume weighted average trading price of $1,016 on the TSX for the 20 trading days ended June 16, 2014, in each case per $1,000 principal amount. Debentureholders who deposit and do not withdraw their Debentures under the Offer will receive a cash payment in respect of all accrued and unpaid interest outstanding on those Debentures which are purchased by InnVest up to, and including, the date that the Debentures are taken up by InnVest under the Offer.

In order to allow holders of the Debentures ("Debentureholders") sufficient time to consider the enhancements to its Offer and the Indenture Amendments, InnVest intends to postpone the meeting of Debentureholders from Tuesday, July 22, 2014 until Friday, July 25, 2014 (the "Meeting") and extend the expiry of the Offer until 5:00 p.m. (Toronto time) on Wednesday, July 30, 2014. The record date for determining the Debentureholders entitled to receive notice of and vote at the Meeting remains June 18, 2014.

At the Meeting, Debentureholders will be asked to consider an extraordinary resolution (the "Extraordinary Resolution") to approve the Indenture Amendments that will, if implemented:

  1. increase the rate of coupon interest payable per annum on the Debentures from 5.75% to 6.25% effective as of the commencement of the next interest accrual period, being September 30, 2014; and

  1. increase the conversion price for each InnVest unit to be issued upon the conversion of one Series G Debenture from $5.80 to $7.50 per unit.

The Offer continues to be subject to the same conditions to InnVest taking up and paying for Debentures deposited to the Offer as previously disclosed to Debentureholders, including that the Extraordinary Resolution in respect of the Indenture Amendments is passed at the Meeting. For the Indenture Amendments to be adopted, holders of at least 66 2/3% of the principal amount of the Debentures, present in person or represented by proxy at the Meeting, must vote FOR the Indenture Amendments at the Meeting.

Two significant Canadian institutional investors who hold, in the aggregate, approximately $10 million in principal amount of Debentures have agreed to vote in favour of the Indenture Amendments.

Full details regarding the Offer, Indenture Amendments and the Meeting are expected to be included in a combined supplemental management information circular, and notice of change, variation and extension (the "Supplemental Circular") that is anticipated to be sent to the registered holders of Debentures on or about July 16, 2014 and will be posted on InnVest's SEDAR profile at www.sedar.com. The Supplemental Circular will supplement and amend the combined management information circular, offer to purchase and issuer bid circular of InnVest dated June 18, 2014 originally sent to holders of Debentures and that is currently available on SEDAR.

VOTING INFORMATION FOR DEBENTUREHOLDERS

The Meeting will now be held on Friday, July 25, 2014 at 10:00 a.m. (Toronto time) at the offices of Norton Rose Fulbright Canada LLP located at Suite 3800, Royal Bank Plaza, South Tower, 200 Bay Street, Toronto, Ontario, M5J 2Z4.

As a Debentureholder, if you have not voted or have voted against the originally proposed indenture amendments, your immediate attention is required. Debentureholders who previously voted for the originally proposed indenture amendments will not need to take any further action in order to have their vote counted in favour of the Indenture Amendments. Debentureholders who previously voted for or against the originally proposed indenture amendments and who now would like to change their vote as it applies to the Indenture Amendments can do so by voting their voting instruction form in accordance with the instructions provided therein. Debentureholders are encouraged to vote as soon as practicable, and in any event no later than the proxy cut off of 10:00 a.m. (Toronto time) on Wednesday, July 23, 2014.

If you have any questions or require assistance in voting your voting instruction form, please contact InnVest's proxy solicitation and information agent Kingsdale Shareholder Services at 1-888-518-6832 (toll-free), 416-867-2272 (outside North America), or by email at contactus@kingsdaleshareholder.com.

FORWARD-LOOKING STATEMENTS

Statements contained in this press release that are not historical facts are forward-looking statements. These forward-looking statements include statements with respect to the expiration of the Offer, the Indenture Amendments and the timing of the take-up and payment for the Debentures deposited to the Offer. These forward-looking statements are based on current expectations of management and involve risks and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. In making such forward-looking statements, management has relied upon a number of material factors and assumptions, including with respect to general economic and financial conditions, interest rates, equity and debt markets, business competition, changes in government regulations or in tax law and the ability of InnVest to obtain required approvals for the Offer and Indenture Amendments. Although management of InnVest believes that the expectations with respect to such forward- looking statements are reasonable, such forward-looking statements are subject to known and unknown risks and uncertainties and, accordingly, there can be no assurance that such expectations will prove to be correct. Among the material risks and uncertainties that could cause such differences include, but are not limited to, that Debentureholder approval for the Indenture Amendments will not be obtained at the Meeting, the risk that one or both of the Offer and/or the Indenture Amendments will not be successfully completed for any reason and the risk that, if completed, InnVest or the Debentureholders may not realize the anticipated benefits of the Indenture Amendments. Readers are cautioned that the foregoing list is not exhaustive. The forward-looking statements included herein are made as of the date hereof and InnVest disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required to do so by applicable securities law.

INNVEST PROFILE

InnVest Real Estate Investment Trust is an unincorporated open-ended real estate investment trust which owns a portfolio of 115 hotels across Canada representing over 14,000 guest rooms operated under internationally recognized brands. InnVest also holds a 50% interest in Choice Hotels Canada Inc., one of the largest franchisors of hotels in Canada. InnVest's units and convertible debentures trade on the Toronto Stock Exchange (the "TSX") under the symbols INN.UN, INN.DB.D, INN.DB.E, INN.DB.F and INN.DB.G.

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