Royal Host Real Estate Investment Trust
TSX : RYL.DB.A
TSX : RYL.UN
TSX : RYL.DB.B
TSX : RYL.DB.C
TSX : RYL.DB.D

Royal Host Real Estate Investment Trust

February 19, 2008 21:01 ET

Royal Host REIT Announces Substantial Issuer Bid for Its Trust Units

CALGARY, ALBERTA--(Marketwire - Feb. 19, 2008) - Royal Host Real Estate Investment Trust (TSX:RYL.UN) (TSX:RYL.DB.A) (TSX:RYL.DB.B) (TSX:RYL.DB.C) (TSX:RYL.DB.D) ("Royal Host" or the "Trust") is pleased to announce a substantial issuer bid, pursuant to which Royal Host will offer to purchase for cancellation up to 5,386,000 of its outstanding trust units (the "Units") at a price of $6.50 per Unit. If the number of Units tendered exceeds 5,386,000, then the tendered Units will be purchased on a pro rata basis (disregarding fractions) according to the number of Units deposited by each depositing Unitholder.

Royal Host believes that the offer is in the best interests of Royal Host and its Unitholders as it provides an attractive use of capital given Royal Host's business and current market valuation while retaining sufficient working capital to pursue the Trust's initiatives. Such purchases will increase the proportionate interest of, and may be advantageous to, all remaining Unitholders.

The Trust intends to finance the purchase of Units from its existing cash and cash flow and it is not anticipated that such purchase will effect Royal Host's monthly distributions to Unitholders.

In accordance with applicable Canadian securities laws, the Trust will suspend purchases of Units pursuant to its normal course issuer bid announced on December 28, 2007 until at least 20 business days after the expiry of the bid or date of the termination of the offer to purchase.

As of February 19, 2008, there were 26,928,586 Units outstanding and, accordingly, the offer is for approximately 20% of the outstanding Trust Units. The offer will be made by way of a substantial issuer bid and will be subject to various conditions typical of transactions of this nature, including the obtaining of regulatory exemption rulings. It is anticipated that the issuer bid circular, containing the terms of the offer and instructions for tendering Units, will be mailed to Unitholders and filed with applicable securities regulators on or about February 20, 2008. The offer will remain open for acceptance for at least 35 days after the date of commencement, unless withdrawn or extended by Royal Host.

Neither the Trust nor its Board of Trustees makes any recommendation to Unitholders as to whether to tender or refrain from tendering their Units into the offer. Unitholders must decide how many Units they will tender, if any. Unitholders are strongly encouraged to review the offer to purchase and the substantial issuer bid circular and related documents carefully and consult with their financial and tax advisors prior to making any decision with respect to the offer.

Royal Host is a fully-integrated hotelier focused on hotel ownership, management and franchising and is Canada's second-largest hotel Real Estate Investment Trust.

Royal Host owns a diversified portfolio of 37 properties, comprising approximately 4,400 guest rooms. The portfolio includes limited, focused and full-service hotels in the mid-market to upscale hospitality segments, and is well represented throughout Canada operating under such recognizable brands as Best Western®, Country Inns & Suites®, Hilton®, Holiday Inn®, Ramada®, Super 8®, Thriftlodge® and Travelodge®, as well as a number of unbranded properties such as the Chimo Hotel in Ottawa and the Grand Okanagan Resort and Conference Centre in Kelowna.

In addition to providing management services to its own portfolio, Royal Host's team manages a number of properties on behalf of third parties using its proven training programs, operating procedures, revenue and yield management systems and sales programs.

Royal Host also owns the master franchise rights for Travelodge® and Thriftlodge® in Canada. Through its subsidiary, Travelodge Canada, Royal Host currently franchises over 100 locations, 14 of which are owned by the Trust, and receives a stable stream of revenue through monthly royalty fees paid by licensed hotel owners and by selling franchise licenses, which enhances the overall diversity of Royal Host's portfolio.

Royal Host trust units and convertible debentures are traded on the Toronto Stock Exchange under the trading symbols "RYL.UN", "RYL.DB.A", "RYL.DB.B", "RYL.DB.C" and "RYL.DB.D", respectively.

This press release contains certain statements that constitute forward-looking information or statements within the meaning of applicable securities laws ("forward-looking statements"). Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual events or the Trust's actual results or performance to differ from the projected events, results or performance contained in such forward-looking statements. Forward-looking statements may also include, without limitation, any statement relating to future events, conditions or circumstances. Royal Host cautions you not to place undue reliance upon such forward-looking statements, which speak only as of the date they are made. The words "anticipate", "believe", "estimate" and "expect" and similar expressions are intended to identify forward-looking statements. Numerous important factors affect Royal Host's ability to repurchase Units pursuant to a substantial issuer bid, and the timing of such an issuer bid or repurchases, as indicated by this press release or by any forward-looking statements made by, or on behalf of, Royal Host, and there can be no assurance that Royal Host will be able to repurchase its Units as set out herein. These factors include, but are not limited to, the following: the need to obtain exemptions from or approval of applicable regulatory authorities including provincial securities commissions, the satisfaction or waiver of various conditions customary for transactions of this nature, market forces, the financial strength of the Trust and other factors discussed in Royal Host's Annual Information Form and other filings with applicable securities regulators. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those indicated in any forward-looking statements. Royal Host disclaims and does not assume any obligation to update these forward-looking statements, except as expressly required by applicable securities laws.

Contact Information

  • Royal Host Real Estate Investment Trust
    A. Brad Cann, C.A.
    Executive Vice President and Chief Financial Officer
    (403) 259-9800
    (403) 259-8580 (FAX)
    Website: www.royalhost.com