newswire.ca
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CHIP REIT says Royal Host offer defective
VANCOUVER, June 7 /CNW/ - Canadian Hotel Income Properties
Real Estate Investment Trust
HOT.un
Canadian Hotel Income Properties Real Estate Investment Trust (''CHIP
REIT'') has asked various securities commissions to cease trade the offer made
by Royal Host Real Estate Investment Trust to CHIP REIT unitholders on May 31,
1999.
In its submission, CHIP REIT says the offer made by Royal Host contains
misleading, inaccurate and incomplete information that would prejudice CHIP
REIT unitholders in assessing the value of the Royal Host units being offered.
CHIP REIT is concerned that Royal Host's public financial forecast has
not been updated since July 1998 despite a number of material changes to its
business and operations. CHIP REIT and its financial advisors consider the
forecast to be vital in allowing them and unitholders to assess the offer.
However, because the forecast is outdated, it is unreliable and may be
misleading.
CHIP REIT is also asking the commissions to order Royal Host to amend its
offering circular to correct its calculation of pro forma distributable cash
per unit from the combined entity. The current calculation suggests that CHIP
REIT unitholders could expect increased distributable cash per unit, whereas a
correct calculation shows that distributable cash per unit would not increase.
CHIP REIT is asking the commissions to order Royal Host to mail a new
offering circular reflecting more accurate information, including a current
forecast, and that Royal Host be required to return to CHIP REIT unitholders
any units that have been tendered.
''We are concerned by the fact that the Royal Host offering circular
contains incorrect and misleading information,'' said Rhys Eyton, Chairman,
President and CEO of CHIP REIT. ''Our unitholders have the right to know the
exact nature of this offer and we will make every effort to ensure that they
do.''
CHIP REIT was Canada's first hotel real estate investment trust and has a
focus on mid-market and upscale full-service hotels. Through upgrades,
repositioning and franchising, CHIP REIT and its wholly owned hotel manager,
CHIP Hospitality, improve the operating performance of the properties within
the portfolio to create value for investors. CHIP REIT currently owns and
operates 36 hotels with close to 8,000 rooms across Canada. CHIP REIT units
trade on The Toronto Stock Exchange under the symbol HOT.un.
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